Correlation Between Highlight Communications and Marubeni
Can any of the company-specific risk be diversified away by investing in both Highlight Communications and Marubeni 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 Marubeni 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 Marubeni, you can compare the effects of market volatilities on Highlight Communications and Marubeni 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 Marubeni. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and Marubeni.
Diversification Opportunities for Highlight Communications and Marubeni
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Highlight and Marubeni is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and Marubeni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marubeni 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 Marubeni. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marubeni has no effect on the direction of Highlight Communications i.e., Highlight Communications and Marubeni go up and down completely randomly.
Pair Corralation between Highlight Communications and Marubeni
Assuming the 90 days trading horizon Highlight Communications AG is expected to generate 1.58 times more return on investment than Marubeni. However, Highlight Communications is 1.58 times more volatile than Marubeni. It trades about 0.35 of its potential returns per unit of risk. Marubeni is currently generating about -0.13 per unit of risk. If you would invest 99.00 in Highlight Communications AG on September 12, 2024 and sell it today you would earn a total of 18.00 from holding Highlight Communications AG or generate 18.18% 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. Marubeni
Performance |
| Timeline |
| Highlight Communications |
| Marubeni |
Highlight Communications and Marubeni Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and Marubeni
The main advantage of trading using opposite Highlight Communications and Marubeni positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications position performs unexpectedly, Marubeni 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 Marubeni will offset losses from the drop in Marubeni's long position.| Highlight Communications vs. The Walt Disney | Highlight Communications vs. Charter Communications | Highlight Communications vs. Warner Music Group | Highlight Communications vs. Superior Plus Corp |
| Marubeni vs. Entravision Communications | Marubeni vs. Highlight Communications AG | Marubeni vs. Magnachip Semiconductor | Marubeni vs. Shenandoah Telecommunications |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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