Correlation Between Bank Central and High Liner
Can any of the company-specific risk be diversified away by investing in both Bank Central 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 Bank Central and High Liner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and High Liner Foods, you can compare the effects of market volatilities on Bank Central 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 Bank Central with a short position of High Liner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and High Liner.
Diversification Opportunities for Bank Central and High Liner
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Bank and High is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Bank Central Asia 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 Bank Central 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 Bank Central Asia 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 Bank Central i.e., Bank Central and High Liner go up and down completely randomly.
Pair Corralation between Bank Central and High Liner
Assuming the 90 days horizon Bank Central Asia is expected to under-perform the High Liner. But the pink sheet apears to be less risky and, when comparing its historical volatility, Bank Central Asia is 1.11 times less risky than High Liner. The pink sheet trades about -0.34 of its potential returns per unit of risk. The 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank Central Asia vs. High Liner Foods
Performance |
| Timeline |
| Bank Central Asia |
| High Liner Foods |
Bank Central and High Liner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank Central and High Liner
The main advantage of trading using opposite Bank Central and High Liner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central 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.The idea behind Bank Central Asia and High Liner Foods 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.| 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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