Correlation Between Highlight Communications and Greek Organization

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

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

Diversification Opportunities for Highlight Communications and Greek Organization

-0.46

Correlation Coefficient

Highlight Communications  Greek Organization

Very good diversification

The 3 months correlation between Highlight and Greek is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and Greek Organization of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greek Organization and Highlight Communications 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 Highlight Communications AG are associated (or correlated) with Greek Organization. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greek Organization has no effect on the direction of Highlight Communications i.e., Highlight Communications and Greek Organization go up and down completely randomly.

Pair Corralation between Highlight Communications and Greek Organization

Assuming the 90 days trading horizon Highlight Communications AG is expected to generate 3.21 times more return on investment than Greek Organization. However, Highlight Communications is 3.21 times more volatile than Greek Organization of. It trades about 0.05 of its potential returns per unit of risk. Greek Organization of is currently generating about 0.17 per unit of risk. If you would invest  111.00  in Highlight Communications AG on December 22, 2024 and sell it today you would earn a total of  11.00  from holding Highlight Communications AG or generate 9.91% return on investment over 90 days.

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

Highlight Communications AG  vs.  Greek Organization of

Highlight Communications

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Highlight Communications AG are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady technical and fundamental indicators, Highlight Communications unveiled solid returns over the last few months and may actually be approaching a breakup point.

Greek Organization

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Greek Organization of are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Greek Organization reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Highlight Communications and Greek Organization

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

The idea behind Highlight Communications AG and Greek Organization of 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.