Correlation Between 111 and High Tide
Can any of the company-specific risk be diversified away by investing in both 111 and High Tide 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 111 and High Tide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 111 Inc and High Tide, you can compare the effects of market volatilities on 111 and High Tide 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 111 with a short position of High Tide. Check out your portfolio center. Please also check ongoing floating volatility patterns of 111 and High Tide.
Diversification Opportunities for 111 and High Tide
Good diversification
The 3 months correlation between 111 and High is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding 111 Inc and High Tide in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Tide and 111 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 111 Inc are associated (or correlated) with High Tide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Tide has no effect on the direction of 111 i.e., 111 and High Tide go up and down completely randomly.
Pair Corralation between 111 and High Tide
Allowing for the 90-day total investment horizon 111 Inc is expected to under-perform the High Tide. In addition to that, 111 is 1.03 times more volatile than High Tide. It trades about -0.37 of its total potential returns per unit of risk. High Tide is currently generating about -0.1 per unit of volatility. If you would invest 292.00 in High Tide on August 23, 2024 and sell it today you would lose (25.00) from holding High Tide or give up 8.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
111 Inc vs. High Tide
Performance |
| Timeline |
| 111 Inc |
| High Tide |
111 and High Tide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 111 and High Tide
The main advantage of trading using opposite 111 and High Tide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 111 position performs unexpectedly, High Tide 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 Tide will offset losses from the drop in High Tide's long position.The idea behind 111 Inc and High Tide 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.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 Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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