Correlation Between SPoT Coffee and High Liner
Can any of the company-specific risk be diversified away by investing in both SPoT Coffee 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 SPoT Coffee and High Liner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SPoT Coffee and High Liner Foods, you can compare the effects of market volatilities on SPoT Coffee 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 SPoT Coffee with a short position of High Liner. Check out your portfolio center. Please also check ongoing floating volatility patterns of SPoT Coffee and High Liner.
Diversification Opportunities for SPoT Coffee and High Liner
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between SPoT and High is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SPoT Coffee 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 SPoT Coffee 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 SPoT Coffee 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 SPoT Coffee i.e., SPoT Coffee and High Liner go up and down completely randomly.
Pair Corralation between SPoT Coffee and High Liner
If you would invest 1,286 in High Liner Foods on September 3, 2024 and sell it today you would earn a total of 255.00 from holding High Liner Foods or generate 19.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
SPoT Coffee vs. High Liner Foods
Performance |
| Timeline |
| SPoT Coffee |
| High Liner Foods |
SPoT Coffee and High Liner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SPoT Coffee and High Liner
The main advantage of trading using opposite SPoT Coffee and High Liner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SPoT Coffee 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.| SPoT Coffee vs. High Liner Foods | SPoT Coffee vs. Richelieu Hardware | SPoT Coffee vs. International Zeolite Corp | SPoT Coffee vs. European Residential Real |
| 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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