Correlation Between GALENA MINING and Highlight Communications

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

By analyzing existing cross correlation between GALENA MINING LTD and Highlight Communications AG, you can compare the effects of market volatilities on GALENA MINING and Highlight Communications 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 GALENA MINING with a short position of Highlight Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of GALENA MINING and Highlight Communications.

Diversification Opportunities for GALENA MINING and Highlight Communications

0.0

Correlation Coefficient

GALENA MINING  Highlight Communications

Pay attention - limited upside

The 3 months correlation between GALENA and Highlight is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding GALENA MINING LTD and Highlight Communications AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highlight Communications and GALENA MINING 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 GALENA MINING LTD are associated (or correlated) with Highlight Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highlight Communications has no effect on the direction of GALENA MINING i.e., GALENA MINING and Highlight Communications go up and down completely randomly.

Pair Corralation between GALENA MINING and Highlight Communications

Assuming the 90 days horizon GALENA MINING LTD is expected to generate 2.74 times more return on investment than Highlight Communications. However, GALENA MINING is 2.74 times more volatile than Highlight Communications AG. It trades about -0.02 of its potential returns per unit of risk. Highlight Communications AG is currently generating about -0.08 per unit of risk. If you would invest  15.00  in GALENA MINING LTD on September 16, 2024 and sell it today you would lose (11.95) from holding GALENA MINING LTD or give up 79.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

GALENA MINING LTD  vs.  Highlight Communications AG

GALENA MINING LTD

Risk-Adjusted Performance

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Very Weak

Over the last 90 days GALENA MINING LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, GALENA MINING is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Highlight Communications

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Highlight Communications AG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Highlight Communications is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with GALENA MINING and Highlight Communications

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

The idea behind GALENA MINING LTD and Highlight Communications AG 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.