Correlation Between Liechtensteinische and Highlight Communications
Can any of the company-specific risk be diversified away by investing in both Liechtensteinische and Highlight Communications 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 Liechtensteinische and Highlight Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liechtensteinische Landesbank Aktiengesellschaft and Highlight Communications AG, you can compare the effects of market volatilities on Liechtensteinische and Highlight Communications 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 Liechtensteinische with a short position of Highlight Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liechtensteinische and Highlight Communications.
Diversification Opportunities for Liechtensteinische and Highlight Communications
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Liechtensteinische and Highlight is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Liechtensteinische Landesbank and Highlight Communications AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highlight Communications and Liechtensteinische 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 Liechtensteinische Landesbank Aktiengesellschaft are associated (or correlated) with Highlight Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highlight Communications has no effect on the direction of Liechtensteinische i.e., Liechtensteinische and Highlight Communications go up and down completely randomly.
Pair Corralation between Liechtensteinische and Highlight Communications
Assuming the 90 days trading horizon Liechtensteinische is expected to generate 66.01 times less return on investment than Highlight Communications. But when comparing it to its historical volatility, Liechtensteinische Landesbank Aktiengesellschaft is 1.48 times less risky than Highlight Communications. It trades about 0.01 of its potential returns per unit of risk. Highlight Communications AG is currently generating about 0.32 of returns per unit of risk over similar time horizon. If you would invest 99.00 in Highlight Communications AG on September 14, 2024 and sell it today you would earn a total of 16.00 from holding Highlight Communications AG or generate 16.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liechtensteinische Landesbank vs. Highlight Communications AG
Performance |
| Timeline |
| Liechtensteinische |
| Highlight Communications |
Liechtensteinische and Highlight Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liechtensteinische and Highlight Communications
The main advantage of trading using opposite Liechtensteinische and Highlight Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liechtensteinische position performs unexpectedly, Highlight Communications 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 Highlight Communications will offset losses from the drop in Highlight Communications' long position.| Liechtensteinische vs. STMicroelectronics NV | Liechtensteinische vs. AOI Electronics Co | Liechtensteinische vs. Nucletron Electronic Aktiengesellschaft | Liechtensteinische vs. ELECTRONIC ARTS |
| Highlight Communications vs. The Walt Disney | Highlight Communications vs. Charter Communications | Highlight Communications vs. Warner Music Group | Highlight Communications vs. Superior Plus Corp |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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