Correlation Between High Liner and Condor Energies

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

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

Diversification Opportunities for High Liner and Condor Energies

0.12

Correlation Coefficient

High Liner  Condor Energies

Average diversification

The 3 months correlation between High and Condor is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and Condor Energies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Condor Energies and High Liner 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 High Liner Foods are associated (or correlated) with Condor Energies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Condor Energies has no effect on the direction of High Liner i.e., High Liner and Condor Energies go up and down completely randomly.

Pair Corralation between High Liner and Condor Energies

Assuming the 90 days trading horizon High Liner Foods is expected to generate 0.37 times more return on investment than Condor Energies. However, High Liner Foods is 2.74 times less risky than Condor Energies. It trades about 0.2 of its potential returns per unit of risk. Condor Energies is currently generating about 0.06 per unit of risk. If you would invest  1,294  in High Liner Foods on September 16, 2024 and sell it today you would earn a total of  278.00  from holding High Liner Foods or generate 21.48% return on investment over 90 days.

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

High Liner Foods  vs.  Condor Energies

High Liner Foods

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in High Liner Foods are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, High Liner displayed solid returns over the last few months and may actually be approaching a breakup point.

Condor Energies

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Condor Energies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Condor Energies displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with High Liner and Condor Energies

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

The idea behind High Liner Foods and Condor Energies 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.