Correlation Between Highlight Communications and COPLAND ROAD
Can any of the company-specific risk be diversified away by investing in both Highlight Communications and COPLAND ROAD 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 COPLAND ROAD 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 COPLAND ROAD CAPITAL, you can compare the effects of market volatilities on Highlight Communications and COPLAND ROAD 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 COPLAND ROAD. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and COPLAND ROAD.
Diversification Opportunities for Highlight Communications and COPLAND ROAD
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Highlight and COPLAND is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and COPLAND ROAD CAPITAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COPLAND ROAD CAPITAL 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 COPLAND ROAD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COPLAND ROAD CAPITAL has no effect on the direction of Highlight Communications i.e., Highlight Communications and COPLAND ROAD go up and down completely randomly.
Pair Corralation between Highlight Communications and COPLAND ROAD
Assuming the 90 days trading horizon Highlight Communications AG is expected to generate 1.73 times more return on investment than COPLAND ROAD. However, Highlight Communications is 1.73 times more volatile than COPLAND ROAD CAPITAL. It trades about 0.25 of its potential returns per unit of risk. COPLAND ROAD CAPITAL is currently generating about 0.23 per unit of risk. If you would invest 110.00 in Highlight Communications AG on October 28, 2024 and sell it today you would earn a total of 37.00 from holding Highlight Communications AG or generate 33.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highlight Communications AG vs. COPLAND ROAD CAPITAL
Performance |
| Timeline |
| Highlight Communications |
| COPLAND ROAD CAPITAL |
Highlight Communications and COPLAND ROAD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and COPLAND ROAD
The main advantage of trading using opposite Highlight Communications and COPLAND ROAD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications position performs unexpectedly, COPLAND ROAD 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 COPLAND ROAD will offset losses from the drop in COPLAND ROAD's long position.| Highlight Communications vs. Beta Systems Software | Highlight Communications vs. PACIFIC ONLINE | Highlight Communications vs. Japan Tobacco | Highlight Communications vs. GungHo Online Entertainment |
| COPLAND ROAD vs. Tower Semiconductor | COPLAND ROAD vs. Direct Line Insurance | COPLAND ROAD vs. Commonwealth Bank of | COPLAND ROAD vs. National Beverage Corp |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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