Correlation Between NYSE Composite and High Liner
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and High Liner 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 Liner Foods, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of High Liner. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and High Liner.
Diversification Opportunities for NYSE Composite and High Liner
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between NYSE and High is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 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 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 NYSE Composite i.e., NYSE Composite and High Liner go up and down completely randomly.
Pair Corralation between NYSE Composite and High Liner
Assuming the 90 days trading horizon NYSE Composite is expected to generate 3.15 times less return on investment than High Liner. But when comparing it to its historical volatility, NYSE Composite is 2.21 times less risky than High Liner. It trades about 0.13 of its potential returns per unit of risk. High Liner Foods is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 973.00 in High Liner Foods on August 24, 2024 and sell it today you would earn a total of 59.00 from holding High Liner Foods or generate 6.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. High Liner Foods
Performance |
| Timeline |
NYSE Composite and High Liner Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
High Liner Foods
Pair trading matchups for High Liner
Pair Trading with NYSE Composite and High Liner
The main advantage of trading using opposite NYSE Composite and High Liner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Akanda Corp | NYSE Composite vs. Valneva SE ADR | NYSE Composite vs. Radcom | NYSE Composite vs. Western Digital |
| High Liner vs. Bit Origin | High Liner vs. Laird Superfood | High Liner vs. Planet Green Holdings | High Liner vs. Stryve Foods |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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