Correlation Between High Liner and Spectra
Can any of the company-specific risk be diversified away by investing in both High Liner and Spectra at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining High Liner and Spectra into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between High Liner Foods and Spectra, you can compare the effects of market volatilities on High Liner and Spectra and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in High Liner with a short position of Spectra. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and Spectra.
Diversification Opportunities for High Liner and Spectra
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between High and Spectra is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and Spectra in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spectra and High Liner is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on High Liner Foods are associated (or correlated) with Spectra. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spectra has no effect on the direction of High Liner i.e., High Liner and Spectra go up and down completely randomly.
Pair Corralation between High Liner and Spectra
Assuming the 90 days trading horizon High Liner Foods is expected to generate 0.86 times more return on investment than Spectra. However, High Liner Foods is 1.17 times less risky than Spectra. It trades about 0.2 of its potential returns per unit of risk. Spectra is currently generating about -0.21 per unit of risk. If you would invest 1,548 in High Liner Foods on November 28, 2024 and sell it today you would earn a total of 125.00 from holding High Liner Foods or generate 8.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Liner Foods vs. Spectra
Performance |
| Timeline |
| High Liner Foods |
| Spectra |
High Liner and Spectra Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and Spectra
The main advantage of trading using opposite High Liner and Spectra positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner position performs unexpectedly, Spectra can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Spectra will offset losses from the drop in Spectra's long position.| High Liner vs. Leons Furniture Limited | High Liner vs. Autocanada | High Liner vs. Maple Leaf Foods | High Liner vs. Premium Brands Holdings |
| Spectra vs. Westshore Terminals Investment | Spectra vs. Economic Investment Trust | Spectra vs. XXIX Metal Corp | Spectra vs. Hemisphere Energy |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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