Correlation Between NYSE Composite and High Tide
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and High Tide 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 NYSE Composite and High Tide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and High Tide, you can compare the effects of market volatilities on NYSE Composite and High Tide 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 NYSE Composite with a short position of High Tide. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and High Tide.
Diversification Opportunities for NYSE Composite and High Tide
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NYSE and High is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and High Tide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Tide and NYSE Composite 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 NYSE Composite are associated (or correlated) with High Tide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Tide has no effect on the direction of NYSE Composite i.e., NYSE Composite and High Tide go up and down completely randomly.
Pair Corralation between NYSE Composite and High Tide
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.69 times less return on investment than High Tide. But when comparing it to its historical volatility, NYSE Composite is 5.34 times less risky than High Tide. It trades about 0.08 of its potential returns per unit of risk. High Tide is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 149.00 in High Tide on August 28, 2024 and sell it today you would earn a total of 142.00 from holding High Tide or generate 95.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. High Tide
Performance |
| Timeline |
NYSE Composite and High Tide Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
High Tide
Pair trading matchups for High Tide
Pair Trading with NYSE Composite and High Tide
The main advantage of trading using opposite NYSE Composite and High Tide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, High Tide 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 Tide will offset losses from the drop in High Tide's long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| High Tide vs. Leafly Holdings | High Tide vs. SunLink Health Systems | High Tide vs. Kiaro Holdings Corp | High Tide vs. Leafly 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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