Correlation Between Highlight Communications and Corporate Travel
Can any of the company-specific risk be diversified away by investing in both Highlight Communications and Corporate Travel 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 Highlight Communications and Corporate Travel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlight Communications AG and Corporate Travel Management, you can compare the effects of market volatilities on Highlight Communications and Corporate Travel 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 Highlight Communications with a short position of Corporate Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and Corporate Travel.
Diversification Opportunities for Highlight Communications and Corporate Travel
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Highlight and Corporate is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and Corporate Travel Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Travel Man and Highlight Communications 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 Highlight Communications AG are associated (or correlated) with Corporate Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Travel Man has no effect on the direction of Highlight Communications i.e., Highlight Communications and Corporate Travel go up and down completely randomly.
Pair Corralation between Highlight Communications and Corporate Travel
Assuming the 90 days trading horizon Highlight Communications AG is expected to generate 1.16 times more return on investment than Corporate Travel. However, Highlight Communications is 1.16 times more volatile than Corporate Travel Management. It trades about 0.33 of its potential returns per unit of risk. Corporate Travel Management is currently generating about 0.25 per unit of risk. If you would invest 99.00 in Highlight Communications AG on September 1, 2024 and sell it today you would earn a total of 22.00 from holding Highlight Communications AG or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highlight Communications AG vs. Corporate Travel Management
Performance |
| Timeline |
| Highlight Communications |
| Corporate Travel Man |
Highlight Communications and Corporate Travel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and Corporate Travel
The main advantage of trading using opposite Highlight Communications and Corporate Travel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications position performs unexpectedly, Corporate Travel 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 Corporate Travel will offset losses from the drop in Corporate Travel's long position.| Highlight Communications vs. CNVISION MEDIA | Highlight Communications vs. PLAYTIKA HOLDING DL 01 | Highlight Communications vs. Seven West Media | Highlight Communications vs. Playa Hotels Resorts |
| Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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