Correlation Between Pool and High Roller

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

By analyzing existing cross correlation between Pool Corporation and High Roller Technologies,, you can compare the effects of market volatilities on Pool and High Roller 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 Pool with a short position of High Roller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pool and High Roller.

Diversification Opportunities for Pool and High Roller

0.16

Correlation Coefficient

Pool  High Roller

Average diversification

The 3 months correlation between Pool and High is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Pool Corp. and High Roller Technologies, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on High Roller Technologies, and Pool 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 Pool Corporation are associated (or correlated) with High Roller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of High Roller Technologies, has no effect on the direction of Pool i.e., Pool and High Roller go up and down completely randomly.

Pair Corralation between Pool and High Roller

Given the investment horizon of 90 days Pool Corporation is expected to generate 0.26 times more return on investment than High Roller. However, Pool Corporation is 3.87 times less risky than High Roller. It trades about 0.02 of its potential returns per unit of risk. High Roller Technologies, is currently generating about -0.07 per unit of risk. If you would invest  35,728  in Pool Corporation on September 14, 2024 and sell it today you would earn a total of  580.00  from holding Pool Corporation or generate 1.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	57.81%
Values	Daily Returns

Pool Corp.  vs.  High Roller Technologies,

Pool

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Pool Corporation are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Pool is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

High Roller Technologies,

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days High Roller Technologies, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with inconsistent performance in the last few months, the Stock's essential indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Pool and High Roller

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

The idea behind Pool Corporation and High Roller Technologies, 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.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.