Correlation Between Northview Residential and High Liner

Can any of the company-specific risk be diversified away by investing in both Northview Residential and High Liner 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 Northview Residential and High Liner into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Northview Residential REIT and High Liner Foods, you can compare the effects of market volatilities on Northview Residential and High Liner 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 Northview Residential with a short position of High Liner. Check out your portfolio center. Please also check ongoing floating volatility patterns of Northview Residential and High Liner.

Diversification Opportunities for Northview Residential and High Liner

-0.1

Correlation Coefficient

Northview Residential  High Liner

Good diversification

The 3 months correlation between Northview and High is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Northview Residential REIT and High Liner Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Liner Foods and Northview Residential 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 Northview Residential REIT are associated (or correlated) with High Liner. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Liner Foods has no effect on the direction of Northview Residential i.e., Northview Residential and High Liner go up and down completely randomly.

Pair Corralation between Northview Residential and High Liner

Assuming the 90 days trading horizon Northview Residential REIT is expected to under-perform the High Liner. But the stock apears to be less risky and, when comparing its historical volatility, Northview Residential REIT is 1.48 times less risky than High Liner. The stock trades about -0.02 of its potential returns per unit of risk. The High Liner Foods is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,548  in High Liner Foods on December 24, 2024 and sell it today you would earn a total of  105.00  from holding High Liner Foods or generate 6.78% return on investment over 90 days.

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

Northview Residential REIT  vs.  High Liner Foods

Northview Residential

Risk-Adjusted Performance

Very Weak

Over the last 90 days Northview Residential REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Northview Residential is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Northview Residential and High Liner

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

The idea behind Northview Residential REIT and High Liner Foods 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.