Correlation Between High Liner and XXIX Metal
Can any of the company-specific risk be diversified away by investing in both High Liner and XXIX Metal 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 XXIX Metal 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 XXIX Metal Corp, you can compare the effects of market volatilities on High Liner and XXIX Metal 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 XXIX Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and XXIX Metal.
Diversification Opportunities for High Liner and XXIX Metal
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between High and XXIX is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and XXIX Metal Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XXIX Metal Corp 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 XXIX Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XXIX Metal Corp has no effect on the direction of High Liner i.e., High Liner and XXIX Metal go up and down completely randomly.
Pair Corralation between High Liner and XXIX Metal
Assuming the 90 days trading horizon High Liner is expected to generate 1.8 times less return on investment than XXIX Metal. But when comparing it to its historical volatility, High Liner Foods is 2.86 times less risky than XXIX Metal. It trades about 0.03 of its potential returns per unit of risk. XXIX Metal Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 14.00 in XXIX Metal Corp on November 5, 2024 and sell it today you would lose (2.00) from holding XXIX Metal Corp or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
High Liner Foods vs. XXIX Metal Corp
Performance |
| Timeline |
| High Liner Foods |
| XXIX Metal Corp |
High Liner and XXIX Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with High Liner and XXIX Metal
The main advantage of trading using opposite High Liner and XXIX Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if High Liner position performs unexpectedly, XXIX Metal 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 XXIX Metal will offset losses from the drop in XXIX Metal'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 |
| XXIX Metal vs. First Quantum Minerals | XXIX Metal vs. Lundin Mining | XXIX Metal vs. Capstone Mining Corp | XXIX Metal vs. HudBay Minerals |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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