Correlation Between Highlight Communications and TT Electronics
Can any of the company-specific risk be diversified away by investing in both Highlight Communications and TT Electronics 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 TT Electronics 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 TT Electronics PLC, you can compare the effects of market volatilities on Highlight Communications and TT Electronics 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 TT Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and TT Electronics.
Diversification Opportunities for Highlight Communications and TT Electronics
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Highlight and 7TT is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and TT Electronics PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TT Electronics PLC 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 TT Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TT Electronics PLC has no effect on the direction of Highlight Communications i.e., Highlight Communications and TT Electronics go up and down completely randomly.
Pair Corralation between Highlight Communications and TT Electronics
Assuming the 90 days trading horizon Highlight Communications AG is expected to generate 2.08 times more return on investment than TT Electronics. However, Highlight Communications is 2.08 times more volatile than TT Electronics PLC. It trades about 0.24 of its potential returns per unit of risk. TT Electronics PLC is currently generating about -0.14 per unit of risk. If you would invest 99.00 in Highlight Communications AG on October 17, 2024 and sell it today you would earn a total of 51.00 from holding Highlight Communications AG or generate 51.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highlight Communications AG vs. TT Electronics PLC
Performance |
| Timeline |
| Highlight Communications |
| TT Electronics PLC |
Highlight Communications and TT Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and TT Electronics
The main advantage of trading using opposite Highlight Communications and TT Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications position performs unexpectedly, TT Electronics 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 TT Electronics will offset losses from the drop in TT Electronics' long position.| Highlight Communications vs. Kingdee International Software | Highlight Communications vs. OPERA SOFTWARE | Highlight Communications vs. SPORT LISBOA E | Highlight Communications vs. DICKS Sporting Goods |
| TT Electronics vs. MOBILE FACTORY INC | TT Electronics vs. Highlight Communications AG | TT Electronics vs. Charter Communications | TT Electronics vs. ASPEN TECHINC DL |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |