Correlation Between Hitechpros and High Co

Can any of the company-specific risk be diversified away by investing in both Hitechpros and High Co 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 Hitechpros and High Co into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hitechpros and High Co SA, you can compare the effects of market volatilities on Hitechpros and High Co 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 Hitechpros with a short position of High Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hitechpros and High Co.

Diversification Opportunities for Hitechpros and High Co

0.36

Correlation Coefficient

Hitechpros  High Co

Weak diversification

The 3 months correlation between Hitechpros and High is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Hitechpros and High Co SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Co SA and Hitechpros 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 Hitechpros are associated (or correlated) with High Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Co SA has no effect on the direction of Hitechpros i.e., Hitechpros and High Co go up and down completely randomly.

Pair Corralation between Hitechpros and High Co

Assuming the 90 days trading horizon Hitechpros is expected to under-perform the High Co. In addition to that, Hitechpros is 1.43 times more volatile than High Co SA. It trades about -0.04 of its total potential returns per unit of risk. High Co SA is currently generating about -0.03 per unit of volatility. If you would invest  257.00  in High Co SA on September 3, 2024 and sell it today you would lose (7.00) from holding High Co SA or give up 2.72% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Hitechpros  vs.  High Co SA

Hitechpros

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hitechpros has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Hitechpros is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

High Co SA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days High Co SA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, High Co is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hitechpros and High Co

The main advantage of trading using opposite Hitechpros and High Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hitechpros position performs unexpectedly, High Co 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 Co will offset losses from the drop in High Co's long position.

The idea behind Hitechpros and High Co SA 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.

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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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.