Correlation Between Boat Rocker and Highwood Asset

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

By analyzing existing cross correlation between Boat Rocker Media and Highwood Asset Management, you can compare the effects of market volatilities on Boat Rocker and Highwood Asset 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 Boat Rocker with a short position of Highwood Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boat Rocker and Highwood Asset.

Diversification Opportunities for Boat Rocker and Highwood Asset

-0.19

Correlation Coefficient

Boat Rocker  Highwood Asset

Good diversification

The 3 months correlation between Boat and Highwood is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Boat Rocker Media and Highwood Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highwood Asset Management and Boat Rocker 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 Boat Rocker Media are associated (or correlated) with Highwood Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highwood Asset Management has no effect on the direction of Boat Rocker i.e., Boat Rocker and Highwood Asset go up and down completely randomly.

Pair Corralation between Boat Rocker and Highwood Asset

Assuming the 90 days trading horizon Boat Rocker Media is expected to under-perform the Highwood Asset. In addition to that, Boat Rocker is 1.06 times more volatile than Highwood Asset Management. It trades about -0.05 of its total potential returns per unit of risk. Highwood Asset Management is currently generating about -0.01 per unit of volatility. If you would invest  1,060  in Highwood Asset Management on October 23, 2024 and sell it today you would lose (470.00) from holding Highwood Asset Management or give up 44.34% of portfolio value over 90 days.

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

Boat Rocker Media  vs.  Highwood Asset Management

Boat Rocker Media

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Boat Rocker Media has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Highwood Asset Management

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Highwood Asset Management are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Highwood Asset is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Boat Rocker and Highwood Asset

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

The idea behind Boat Rocker Media and Highwood Asset Management 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.