Correlation Between Highlight Communications and Computer
Can any of the company-specific risk be diversified away by investing in both Highlight Communications and Computer 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 Computer 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 Computer And Technologies, you can compare the effects of market volatilities on Highlight Communications and Computer 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 Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and Computer.
Diversification Opportunities for Highlight Communications and Computer
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Highlight and Computer is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and Computer And Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer And Technologies 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 Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer And Technologies has no effect on the direction of Highlight Communications i.e., Highlight Communications and Computer go up and down completely randomly.
Pair Corralation between Highlight Communications and Computer
Assuming the 90 days trading horizon Highlight Communications AG is expected to generate 0.88 times more return on investment than Computer. However, Highlight Communications AG is 1.14 times less risky than Computer. It trades about 0.34 of its potential returns per unit of risk. Computer And Technologies is currently generating about -0.08 per unit of risk. If you would invest 98.00 in Highlight Communications AG on September 13, 2024 and sell it today you would earn a total of 17.00 from holding Highlight Communications AG or generate 17.35% 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. Computer And Technologies
Performance |
| Timeline |
| Highlight Communications |
| Computer And Technologies |
Highlight Communications and Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and Computer
The main advantage of trading using opposite Highlight Communications and Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications position performs unexpectedly, Computer 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 Computer will offset losses from the drop in Computer's long position.| Highlight Communications vs. Solstad Offshore ASA | Highlight Communications vs. SBM OFFSHORE | Highlight Communications vs. Ares Management Corp | Highlight Communications vs. TOREX SEMICONDUCTOR LTD |
| Computer vs. Cognizant Technology Solutions | Computer vs. Superior Plus Corp | Computer vs. SIVERS SEMICONDUCTORS AB | Computer vs. Norsk Hydro ASA |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |