Correlation Between Highlight Communications and WT OFFSHORE
Can any of the company-specific risk be diversified away by investing in both Highlight Communications and WT OFFSHORE 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 WT OFFSHORE 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 WT OFFSHORE, you can compare the effects of market volatilities on Highlight Communications and WT OFFSHORE 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 WT OFFSHORE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and WT OFFSHORE.
Diversification Opportunities for Highlight Communications and WT OFFSHORE
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Highlight and UWV is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and WT OFFSHORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT OFFSHORE 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 WT OFFSHORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT OFFSHORE has no effect on the direction of Highlight Communications i.e., Highlight Communications and WT OFFSHORE go up and down completely randomly.
Pair Corralation between Highlight Communications and WT OFFSHORE
Assuming the 90 days trading horizon Highlight Communications AG is expected to generate 0.88 times more return on investment than WT OFFSHORE. However, Highlight Communications AG is 1.14 times less risky than WT OFFSHORE. It trades about 0.33 of its potential returns per unit of risk. WT OFFSHORE is currently generating about -0.06 per unit of risk. If you would invest 99.00 in Highlight Communications AG on September 1, 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 | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highlight Communications AG vs. WT OFFSHORE
Performance |
| Timeline |
| Highlight Communications |
| WT OFFSHORE |
Highlight Communications and WT OFFSHORE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and WT OFFSHORE
The main advantage of trading using opposite Highlight Communications and WT OFFSHORE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications position performs unexpectedly, WT OFFSHORE 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 WT OFFSHORE will offset losses from the drop in WT OFFSHORE's long position.| Highlight Communications vs. CNVISION MEDIA | Highlight Communications vs. PLAYTIKA HOLDING DL 01 | Highlight Communications vs. Seven West Media | Highlight Communications vs. Playa Hotels Resorts |
| WT OFFSHORE vs. Playtech plc | WT OFFSHORE vs. ORMAT TECHNOLOGIES | WT OFFSHORE vs. MARKET VECTR RETAIL | WT OFFSHORE vs. RCM TECHNOLOGIES |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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