Correlation Between Highlight Communications and VIVA WINE
Can any of the company-specific risk be diversified away by investing in both Highlight Communications and VIVA WINE 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 VIVA WINE 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 VIVA WINE GROUP, you can compare the effects of market volatilities on Highlight Communications and VIVA WINE 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 VIVA WINE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and VIVA WINE.
Diversification Opportunities for Highlight Communications and VIVA WINE
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Highlight and VIVA is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and VIVA WINE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VIVA WINE GROUP 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 VIVA WINE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VIVA WINE GROUP has no effect on the direction of Highlight Communications i.e., Highlight Communications and VIVA WINE go up and down completely randomly.
Pair Corralation between Highlight Communications and VIVA WINE
Assuming the 90 days trading horizon Highlight Communications AG is expected to under-perform the VIVA WINE. In addition to that, Highlight Communications is 2.06 times more volatile than VIVA WINE GROUP. It trades about -0.12 of its total potential returns per unit of risk. VIVA WINE GROUP is currently generating about -0.01 per unit of volatility. If you would invest 358.00 in VIVA WINE GROUP on September 2, 2024 and sell it today you would lose (18.00) from holding VIVA WINE GROUP or give up 5.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highlight Communications AG vs. VIVA WINE GROUP
Performance |
| Timeline |
| Highlight Communications |
| VIVA WINE GROUP |
Highlight Communications and VIVA WINE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and VIVA WINE
The main advantage of trading using opposite Highlight Communications and VIVA WINE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications position performs unexpectedly, VIVA WINE 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 VIVA WINE will offset losses from the drop in VIVA WINE's long position.| Highlight Communications vs. Netflix | Highlight Communications vs. Warner Music Group | Highlight Communications vs. Superior Plus Corp | Highlight Communications vs. NMI Holdings |
| VIVA WINE vs. LG Display Co | VIVA WINE vs. SBA Communications Corp | VIVA WINE vs. PLAY2CHILL SA ZY | VIVA WINE vs. VIAPLAY GROUP AB |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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