Correlation Between Therma Bright and High Liner
Can any of the company-specific risk be diversified away by investing in both Therma Bright 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 Therma Bright and High Liner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Therma Bright and High Liner Foods, you can compare the effects of market volatilities on Therma Bright 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 Therma Bright with a short position of High Liner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Therma Bright and High Liner.
Diversification Opportunities for Therma Bright and High Liner
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Therma and High is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Therma Bright 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 Therma Bright 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 Therma Bright 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 Therma Bright i.e., Therma Bright and High Liner go up and down completely randomly.
Pair Corralation between Therma Bright and High Liner
Assuming the 90 days trading horizon Therma Bright is expected to under-perform the High Liner. In addition to that, Therma Bright is 5.34 times more volatile than High Liner Foods. It trades about -0.3 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 1,325 in High Liner Foods on August 24, 2024 and sell it today you would earn a total of 200.00 from holding High Liner Foods or generate 15.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Therma Bright vs. High Liner Foods
Performance |
| Timeline |
| Therma Bright |
| High Liner Foods |
Therma Bright and High Liner Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Therma Bright and High Liner
The main advantage of trading using opposite Therma Bright and High Liner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Therma Bright 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.| Therma Bright vs. Solar Alliance Energy | Therma Bright vs. Braille Energy Systems | Therma Bright vs. MedMira | Therma Bright vs. Lite Access Technologies |
| High Liner vs. Leons Furniture Limited | High Liner vs. Autocanada | High Liner vs. Exco Technologies Limited |
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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