Correlation Between AMREP and Highway Holdings
Can any of the company-specific risk be diversified away by investing in both AMREP and Highway Holdings 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 AMREP and Highway Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AMREP and Highway Holdings Limited, you can compare the effects of market volatilities on AMREP and Highway Holdings 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 AMREP with a short position of Highway Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of AMREP and Highway Holdings.
Diversification Opportunities for AMREP and Highway Holdings
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AMREP and Highway is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding AMREP and Highway Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highway Holdings and AMREP 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 AMREP are associated (or correlated) with Highway Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highway Holdings has no effect on the direction of AMREP i.e., AMREP and Highway Holdings go up and down completely randomly.
Pair Corralation between AMREP and Highway Holdings
Considering the 90-day investment horizon AMREP is expected to generate 4.11 times more return on investment than Highway Holdings. However, AMREP is 4.11 times more volatile than Highway Holdings Limited. It trades about 0.18 of its potential returns per unit of risk. Highway Holdings Limited is currently generating about 0.16 per unit of risk. If you would invest 3,078 in AMREP on September 3, 2024 and sell it today you would earn a total of 526.00 from holding AMREP or generate 17.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AMREP vs. Highway Holdings Limited
Performance |
| Timeline |
| AMREP |
| Highway Holdings |
AMREP and Highway Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AMREP and Highway Holdings
The main advantage of trading using opposite AMREP and Highway Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AMREP position performs unexpectedly, Highway Holdings 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 Highway Holdings will offset losses from the drop in Highway Holdings' long position.| AMREP vs. Landsea Homes Corp | AMREP vs. Forestar Group | AMREP vs. Five Point Holdings | AMREP vs. American Realty Investors |
| Highway Holdings vs. Deswell Industries | Highway Holdings vs. SCOR PK | Highway Holdings vs. HUMANA INC | Highway Holdings vs. Aquagold International |
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 CEOs Directory module to screen CEOs from public companies around the world.
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