Correlation Between SHIONOGI and Highlight Communications

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

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

Diversification Opportunities for SHIONOGI and Highlight Communications

0.0

Correlation Coefficient

SHIONOGI  Highlight Communications

Pay attention - limited upside

The 3 months correlation between SHIONOGI and Highlight is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SHIONOGI LTD and Highlight Communications AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highlight Communications and SHIONOGI 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 SHIONOGI LTD are associated (or correlated) with Highlight Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highlight Communications has no effect on the direction of SHIONOGI i.e., SHIONOGI and Highlight Communications go up and down completely randomly.

Pair Corralation between SHIONOGI and Highlight Communications

If you would invest  116.00  in Highlight Communications AG on October 10, 2024 and sell it today you would earn a total of  23.00  from holding Highlight Communications AG or generate 19.83% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.88%
Values	Daily Returns

SHIONOGI LTD   vs.  Highlight Communications AG

SHIONOGI LTD

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days SHIONOGI LTD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SHIONOGI is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Highlight Communications

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Highlight Communications AG are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, Highlight Communications unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SHIONOGI and Highlight Communications

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

The idea behind SHIONOGI LTD and Highlight Communications AG 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.