Correlation Between Highway Holdings and Able View
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Able View 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 Highway Holdings and Able View into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highway Holdings Limited and Able View Global, you can compare the effects of market volatilities on Highway Holdings and Able View 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 Highway Holdings with a short position of Able View. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Able View.
Diversification Opportunities for Highway Holdings and Able View
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Highway and Able is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Able View Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Able View Global and Highway Holdings 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 Highway Holdings Limited are associated (or correlated) with Able View. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Able View Global has no effect on the direction of Highway Holdings i.e., Highway Holdings and Able View go up and down completely randomly.
Pair Corralation between Highway Holdings and Able View
Given the investment horizon of 90 days Highway Holdings Limited is expected to generate 1.03 times more return on investment than Able View. However, Highway Holdings is 1.03 times more volatile than Able View Global. It trades about 0.05 of its potential returns per unit of risk. Able View Global is currently generating about -0.17 per unit of risk. If you would invest 180.00 in Highway Holdings Limited on September 12, 2024 and sell it today you would earn a total of 13.50 from holding Highway Holdings Limited or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highway Holdings Limited vs. Able View Global
Performance |
| Timeline |
| Highway Holdings |
| Able View Global |
Highway Holdings and Able View Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and Able View
The main advantage of trading using opposite Highway Holdings and Able View positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Able View 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 Able View will offset losses from the drop in Able View's long position.| Highway Holdings vs. Deswell Industries | Highway Holdings vs. Euro Tech Holdings | Highway Holdings vs. China Natural Resources | Highway Holdings vs. Arts Way Manufacturing Co |
| Able View vs. Alvarium Tiedemann Holdings | Able View vs. Bluerock Homes Trust | Able View vs. Yum Brands | Able View vs. Dennys Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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