Correlation Between CXApp and Highway Holdings
Can any of the company-specific risk be diversified away by investing in both CXApp 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 CXApp and Highway Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CXApp Inc and Highway Holdings Limited, you can compare the effects of market volatilities on CXApp 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 CXApp with a short position of Highway Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of CXApp and Highway Holdings.
Diversification Opportunities for CXApp and Highway Holdings
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CXApp and Highway is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding CXApp Inc and Highway Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highway Holdings and CXApp 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 CXApp Inc 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 CXApp i.e., CXApp and Highway Holdings go up and down completely randomly.
Pair Corralation between CXApp and Highway Holdings
Assuming the 90 days horizon CXApp Inc is expected to generate 1.78 times more return on investment than Highway Holdings. However, CXApp is 1.78 times more volatile than Highway Holdings Limited. It trades about 0.04 of its potential returns per unit of risk. Highway Holdings Limited is currently generating about 0.0 per unit of risk. If you would invest 21.00 in CXApp Inc on September 12, 2024 and sell it today you would earn a total of 1.00 from holding CXApp Inc or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.2% |
| Values | Daily Returns |
CXApp Inc vs. Highway Holdings Limited
Performance |
| Timeline |
| CXApp Inc |
| Highway Holdings |
CXApp and Highway Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CXApp and Highway Holdings
The main advantage of trading using opposite CXApp and Highway Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CXApp 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.The idea behind CXApp Inc and Highway Holdings Limited 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.| Highway Holdings vs. Deswell Industries | Highway Holdings vs. Euro Tech Holdings | Highway Holdings vs. China Natural Resources | Highway Holdings vs. Arts Way Manufacturing Co |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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