Correlation Between High Liner and Gunpoint Exploration

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

Diversification Opportunities for High Liner and Gunpoint Exploration

-0.26

Correlation Coefficient

High Liner  Gunpoint Exploration

Very good diversification

The 3 months correlation between High and Gunpoint is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding High Liner Foods and Gunpoint Exploration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gunpoint Exploration 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 Gunpoint Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gunpoint Exploration has no effect on the direction of High Liner i.e., High Liner and Gunpoint Exploration go up and down completely randomly.

Pair Corralation between High Liner and Gunpoint Exploration

Assuming the 90 days trading horizon High Liner Foods is expected to generate 0.53 times more return on investment than Gunpoint Exploration. However, High Liner Foods is 1.9 times less risky than Gunpoint Exploration. It trades about 0.07 of its potential returns per unit of risk. Gunpoint Exploration is currently generating about -0.04 per unit of risk. If you would invest  1,553  in High Liner Foods on December 21, 2024 and sell it today you would earn a total of  96.00  from holding High Liner Foods or generate 6.18% return on investment over 90 days.

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

High Liner Foods  vs.  Gunpoint Exploration

High Liner Foods

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in High Liner Foods are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, High Liner may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Gunpoint Exploration

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gunpoint Exploration has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating 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 Gunpoint Exploration

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

The idea behind High Liner Foods and Gunpoint Exploration 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.