Correlation Between Taiga Building and High Liner
Can any of the company-specific risk be diversified away by investing in both Taiga Building 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 Taiga Building and High Liner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiga Building Products and High Liner Foods, you can compare the effects of market volatilities on Taiga Building 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 Taiga Building with a short position of High Liner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiga Building and High Liner.
Diversification Opportunities for Taiga Building and High Liner
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Taiga and High is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Taiga Building Products 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 Taiga Building 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 Taiga Building Products 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 Taiga Building i.e., Taiga Building and High Liner go up and down completely randomly.
Pair Corralation between Taiga Building and High Liner
Assuming the 90 days trading horizon Taiga Building Products is expected to under-perform the High Liner. In addition to that, Taiga Building is 1.03 times more volatile than High Liner Foods. It trades about -0.03 of its total potential returns per unit of risk. High Liner Foods is currently generating about 0.37 per unit of volatility. If you would invest 1,324 in High Liner Foods on August 28, 2024 and sell it today you would earn a total of 210.00 from holding High Liner Foods or generate 15.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Taiga Building Products vs. High Liner Foods
Performance |
| Timeline |
| Taiga Building Products |
| High Liner Foods |
Taiga Building and High Liner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiga Building and High Liner
The main advantage of trading using opposite Taiga Building and High Liner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiga Building 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.| Taiga Building vs. Goodfellow | Taiga Building vs. Conifex Timber | Taiga Building vs. Supremex | Taiga Building vs. Western Forest Products |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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