Correlation Between Brompton Lifeco and Highwood Asset

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Brompton Lifeco and Highwood Asset 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 Brompton Lifeco and Highwood Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brompton Lifeco Split and Highwood Asset Management, you can compare the effects of market volatilities on Brompton Lifeco and Highwood Asset 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 Brompton Lifeco with a short position of Highwood Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brompton Lifeco and Highwood Asset.

Diversification Opportunities for Brompton Lifeco and Highwood Asset

0.51
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Brompton and Highwood is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Brompton Lifeco Split and Highwood Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highwood Asset Management and Brompton Lifeco 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 Brompton Lifeco Split are associated (or correlated) with Highwood Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highwood Asset Management has no effect on the direction of Brompton Lifeco i.e., Brompton Lifeco and Highwood Asset go up and down completely randomly.

Pair Corralation between Brompton Lifeco and Highwood Asset

Assuming the 90 days trading horizon Brompton Lifeco Split is expected to generate 0.67 times more return on investment than Highwood Asset. However, Brompton Lifeco Split is 1.49 times less risky than Highwood Asset. It trades about 0.1 of its potential returns per unit of risk. Highwood Asset Management is currently generating about 0.01 per unit of risk. If you would invest  516.00  in Brompton Lifeco Split on September 12, 2024 and sell it today you would earn a total of  514.00  from holding Brompton Lifeco Split or generate 99.61% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Brompton Lifeco Split  vs.  Highwood Asset Management

 Performance 
       Timeline  
Brompton Lifeco Split 

Risk-Adjusted Performance

22 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Brompton Lifeco Split are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Brompton Lifeco displayed solid returns over the last few months and may actually be approaching a breakup point.
Highwood Asset Management 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Highwood Asset Management are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Highwood Asset is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Brompton Lifeco and Highwood Asset Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Brompton Lifeco and Highwood Asset

The main advantage of trading using opposite Brompton Lifeco and Highwood Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brompton Lifeco position performs unexpectedly, Highwood Asset 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 Highwood Asset will offset losses from the drop in Highwood Asset's long position.
The idea behind Brompton Lifeco Split and Highwood Asset Management pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.

Other Complementary Tools

Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Odds Of Bankruptcy
Get analysis of equity chance of financial distress in the next 2 years
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Portfolio Holdings
Check your current holdings and cash postion to detemine if your portfolio needs rebalancing