Correlation Between Pollard Banknote and High Liner
Can any of the company-specific risk be diversified away by investing in both Pollard Banknote 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 Pollard Banknote and High Liner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pollard Banknote Limited and High Liner Foods, you can compare the effects of market volatilities on Pollard Banknote 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 Pollard Banknote with a short position of High Liner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pollard Banknote and High Liner.
Diversification Opportunities for Pollard Banknote and High Liner
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Pollard and High is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Pollard Banknote Limited 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 Pollard Banknote 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 Pollard Banknote Limited 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 Pollard Banknote i.e., Pollard Banknote and High Liner go up and down completely randomly.
Pair Corralation between Pollard Banknote and High Liner
Assuming the 90 days trading horizon Pollard Banknote is expected to generate 2.54 times less return on investment than High Liner. In addition to that, Pollard Banknote is 1.4 times more volatile than High Liner Foods. It trades about 0.13 of its total potential returns per unit of risk. High Liner Foods is currently generating about 0.45 per unit of volatility. If you would invest 1,293 in High Liner Foods on September 1, 2024 and sell it today you would earn a total of 233.00 from holding High Liner Foods or generate 18.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pollard Banknote Limited vs. High Liner Foods
Performance |
| Timeline |
| Pollard Banknote |
| High Liner Foods |
Pollard Banknote and High Liner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pollard Banknote and High Liner
The main advantage of trading using opposite Pollard Banknote and High Liner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pollard Banknote 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.| Pollard Banknote vs. TFI International | Pollard Banknote vs. Baylin Technologies | Pollard Banknote vs. Information Services |
| High Liner vs. Leons Furniture Limited | High Liner vs. Autocanada | High Liner vs. Maple Leaf Foods | High Liner vs. Premium Brands 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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