Correlation Between Highwood Asset and Goeasy
Can any of the company-specific risk be diversified away by investing in both Highwood Asset and Goeasy 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 Highwood Asset and Goeasy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highwood Asset Management and goeasy, you can compare the effects of market volatilities on Highwood Asset and Goeasy 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 Highwood Asset with a short position of Goeasy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highwood Asset and Goeasy.
Diversification Opportunities for Highwood Asset and Goeasy
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Highwood and Goeasy is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Highwood Asset Management and goeasy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on goeasy and Highwood Asset 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 Highwood Asset Management are associated (or correlated) with Goeasy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of goeasy has no effect on the direction of Highwood Asset i.e., Highwood Asset and Goeasy go up and down completely randomly.
Pair Corralation between Highwood Asset and Goeasy
Assuming the 90 days horizon Highwood Asset Management is expected to generate 1.19 times more return on investment than Goeasy. However, Highwood Asset is 1.19 times more volatile than goeasy. It trades about 0.05 of its potential returns per unit of risk. goeasy is currently generating about -0.08 per unit of risk. If you would invest 570.00 in Highwood Asset Management on September 14, 2024 and sell it today you would earn a total of 28.00 from holding Highwood Asset Management or generate 4.91% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 98.44% |
Values | Daily Returns |
Highwood Asset Management vs. goeasy
Performance |
Timeline |
Highwood Asset Management |
goeasy |
Highwood Asset and Goeasy Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Highwood Asset and Goeasy
The main advantage of trading using opposite Highwood Asset and Goeasy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highwood Asset position performs unexpectedly, Goeasy 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 Goeasy will offset losses from the drop in Goeasy's long position.Highwood Asset vs. MINT Income Fund | Highwood Asset vs. Canadian High Income | Highwood Asset vs. Blue Ribbon Income | Highwood Asset vs. Australian REIT Income |
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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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