Correlation Between High Liner and Discovery Harbour

Can any of the company-specific risk be diversified away by investing in both High Liner and Discovery Harbour 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 Discovery Harbour 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 Discovery Harbour Resources, you can compare the effects of market volatilities on High Liner and Discovery Harbour 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 Discovery Harbour. Check out your portfolio center. Please also check ongoing floating volatility patterns of High Liner and Discovery Harbour.

Diversification Opportunities for High Liner and Discovery Harbour

-0.84

Correlation Coefficient

High Liner  Discovery Harbour

Pay attention - limited upside

The 3 months correlation between High and Discovery is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and Discovery Harbour Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Discovery Harbour 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 Discovery Harbour. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Discovery Harbour has no effect on the direction of High Liner i.e., High Liner and Discovery Harbour go up and down completely randomly.

Pair Corralation between High Liner and Discovery Harbour

If you would invest  1,578  in High Liner Foods on October 11, 2024 and sell it today you would earn a total of  10.00  from holding High Liner Foods or generate 0.63% return on investment over 90 days.

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

High Liner Foods  vs.  Discovery Harbour Resources

High Liner Foods

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in High Liner Foods are ranked lower than 14 (%) 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.

Discovery Harbour

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Discovery Harbour Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with High Liner and Discovery Harbour

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

The idea behind High Liner Foods and Discovery Harbour Resources 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.