Correlation Between Highlight Communications and COMPUTERSHARE
Can any of the company-specific risk be diversified away by investing in both Highlight Communications and COMPUTERSHARE 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 COMPUTERSHARE 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 COMPUTERSHARE, you can compare the effects of market volatilities on Highlight Communications and COMPUTERSHARE 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 COMPUTERSHARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and COMPUTERSHARE.
Diversification Opportunities for Highlight Communications and COMPUTERSHARE
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Highlight and COMPUTERSHARE is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and COMPUTERSHARE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMPUTERSHARE 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 COMPUTERSHARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMPUTERSHARE has no effect on the direction of Highlight Communications i.e., Highlight Communications and COMPUTERSHARE go up and down completely randomly.
Pair Corralation between Highlight Communications and COMPUTERSHARE
Assuming the 90 days trading horizon Highlight Communications AG is expected to under-perform the COMPUTERSHARE. In addition to that, Highlight Communications is 1.76 times more volatile than COMPUTERSHARE. It trades about -0.05 of its total potential returns per unit of risk. COMPUTERSHARE is currently generating about 0.05 per unit of volatility. If you would invest 1,404 in COMPUTERSHARE on October 19, 2024 and sell it today you would earn a total of 636.00 from holding COMPUTERSHARE or generate 45.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highlight Communications AG vs. COMPUTERSHARE
Performance |
| Timeline |
| Highlight Communications |
| COMPUTERSHARE |
Highlight Communications and COMPUTERSHARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and COMPUTERSHARE
The main advantage of trading using opposite Highlight Communications and COMPUTERSHARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications position performs unexpectedly, COMPUTERSHARE 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 COMPUTERSHARE will offset losses from the drop in COMPUTERSHARE's long position.| Highlight Communications vs. The Yokohama Rubber | Highlight Communications vs. THRACE PLASTICS | Highlight Communications vs. NEWELL RUBBERMAID | Highlight Communications vs. ALBIS LEASING AG |
| COMPUTERSHARE vs. The Boston Beer | COMPUTERSHARE vs. Austevoll Seafood ASA | COMPUTERSHARE vs. LIFEWAY FOODS | COMPUTERSHARE vs. AUSNUTRIA DAIRY |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |