Correlation Between HPQ Silicon and High Liner
Can any of the company-specific risk be diversified away by investing in both HPQ Silicon and High Liner 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 HPQ Silicon and High Liner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HPQ Silicon Resources and High Liner Foods, you can compare the effects of market volatilities on HPQ Silicon and High Liner 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 HPQ Silicon with a short position of High Liner. Check out your portfolio center. Please also check ongoing floating volatility patterns of HPQ Silicon and High Liner.
Diversification Opportunities for HPQ Silicon and High Liner
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between HPQ and High is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding HPQ Silicon Resources and High Liner Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Liner Foods and HPQ Silicon 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 HPQ Silicon Resources are associated (or correlated) with High Liner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Liner Foods has no effect on the direction of HPQ Silicon i.e., HPQ Silicon and High Liner go up and down completely randomly.
Pair Corralation between HPQ Silicon and High Liner
Assuming the 90 days horizon HPQ Silicon is expected to generate 2.87 times less return on investment than High Liner. In addition to that, HPQ Silicon is 2.72 times more volatile than High Liner Foods. It trades about 0.02 of its total potential returns per unit of risk. High Liner Foods is currently generating about 0.18 per unit of volatility. If you would invest 1,562 in High Liner Foods on November 29, 2024 and sell it today you would earn a total of 111.00 from holding High Liner Foods or generate 7.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
HPQ Silicon Resources vs. High Liner Foods
Performance |
| Timeline |
| HPQ Silicon Resources |
| High Liner Foods |
HPQ Silicon and High Liner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with HPQ Silicon and High Liner
The main advantage of trading using opposite HPQ Silicon and High Liner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HPQ Silicon position performs unexpectedly, High Liner 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 High Liner will offset losses from the drop in High Liner's long position.| HPQ Silicon vs. PyroGenesis Canada | HPQ Silicon vs. Solar Alliance Energy | HPQ Silicon vs. Braille Energy Systems |
| High Liner vs. Leons Furniture Limited | High Liner vs. Autocanada | High Liner vs. Maple Leaf Foods | High Liner vs. Premium Brands Holdings |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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