Correlation Between Corby Spirit and High Liner
Can any of the company-specific risk be diversified away by investing in both Corby Spirit 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 Corby Spirit and High Liner into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corby Spirit and and High Liner Foods, you can compare the effects of market volatilities on Corby Spirit 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 Corby Spirit with a short position of High Liner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corby Spirit and High Liner.
Diversification Opportunities for Corby Spirit and High Liner
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Corby and High is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Corby Spirit and 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 Corby Spirit 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 Corby Spirit and 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 Corby Spirit i.e., Corby Spirit and High Liner go up and down completely randomly.
Pair Corralation between Corby Spirit and High Liner
Assuming the 90 days trading horizon Corby Spirit and is expected to under-perform the High Liner. But the stock apears to be less risky and, when comparing its historical volatility, Corby Spirit and is 1.39 times less risky than High Liner. The stock trades about -0.03 of its potential returns per unit of risk. The High Liner Foods is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 1,309 in High Liner Foods on September 25, 2024 and sell it today you would earn a total of 261.00 from holding High Liner Foods or generate 19.94% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Corby Spirit and vs. High Liner Foods
Performance |
Timeline |
Corby Spirit |
High Liner Foods |
Corby Spirit and High Liner Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Corby Spirit and High Liner
The main advantage of trading using opposite Corby Spirit and High Liner positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corby Spirit 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.Corby Spirit vs. Corby Spirit and | Corby Spirit vs. Andrew Peller Limited | Corby Spirit vs. North West | Corby Spirit 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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