Correlation Between Highlight Communications and Perma-Fix Environmental
Can any of the company-specific risk be diversified away by investing in both Highlight Communications and Perma-Fix Environmental 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 Perma-Fix Environmental 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 Perma Fix Environmental Services, you can compare the effects of market volatilities on Highlight Communications and Perma-Fix Environmental 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 Perma-Fix Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and Perma-Fix Environmental.
Diversification Opportunities for Highlight Communications and Perma-Fix Environmental
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Highlight and Perma-Fix is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and Perma Fix Environmental Servic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perma Fix Environmental 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 Perma-Fix Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perma Fix Environmental has no effect on the direction of Highlight Communications i.e., Highlight Communications and Perma-Fix Environmental go up and down completely randomly.
Pair Corralation between Highlight Communications and Perma-Fix Environmental
Assuming the 90 days trading horizon Highlight Communications AG is expected to generate 0.59 times more return on investment than Perma-Fix Environmental. However, Highlight Communications AG is 1.71 times less risky than Perma-Fix Environmental. It trades about 0.33 of its potential returns per unit of risk. Perma Fix Environmental Services is currently generating about 0.07 per unit of risk. If you would invest 99.00 in Highlight Communications AG on September 2, 2024 and sell it today you would earn a total of 22.00 from holding Highlight Communications AG or generate 22.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highlight Communications AG vs. Perma Fix Environmental Servic
Performance |
| Timeline |
| Highlight Communications |
| Perma Fix Environmental |
Highlight Communications and Perma-Fix Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and Perma-Fix Environmental
The main advantage of trading using opposite Highlight Communications and Perma-Fix Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications position performs unexpectedly, Perma-Fix Environmental 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 Perma-Fix Environmental will offset losses from the drop in Perma-Fix Environmental's long position.| Highlight Communications vs. Netflix | Highlight Communications vs. Warner Music Group | Highlight Communications vs. Superior Plus Corp | Highlight Communications vs. NMI Holdings |
| Perma-Fix Environmental vs. Veolia Environnement SA | Perma-Fix Environmental vs. Superior Plus Corp | Perma-Fix Environmental vs. NMI Holdings | Perma-Fix Environmental vs. Origin Agritech |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |