Correlation Between Highway Holdings and Alternus Energy
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Alternus Energy 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 Alternus Energy 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 Alternus Energy Group, you can compare the effects of market volatilities on Highway Holdings and Alternus Energy 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 Alternus Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Alternus Energy.
Diversification Opportunities for Highway Holdings and Alternus Energy
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Highway and Alternus is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Alternus Energy Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alternus Energy Group 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 Alternus Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alternus Energy Group has no effect on the direction of Highway Holdings i.e., Highway Holdings and Alternus Energy go up and down completely randomly.
Pair Corralation between Highway Holdings and Alternus Energy
Given the investment horizon of 90 days Highway Holdings Limited is expected to generate 0.05 times more return on investment than Alternus Energy. However, Highway Holdings Limited is 20.91 times less risky than Alternus Energy. It trades about -0.02 of its potential returns per unit of risk. Alternus Energy Group is currently generating about -0.34 per unit of risk. If you would invest 186.00 in Highway Holdings Limited on November 28, 2024 and sell it today you would lose (1.00) from holding Highway Holdings Limited or give up 0.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Highway Holdings Limited vs. Alternus Energy Group
Performance |
| Timeline |
| Highway Holdings |
| Alternus Energy Group |
Highway Holdings and Alternus Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and Alternus Energy
The main advantage of trading using opposite Highway Holdings and Alternus Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Alternus Energy 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 Alternus Energy will offset losses from the drop in Alternus Energy'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 |
| Alternus Energy vs. Boyd Gaming | Alternus Energy vs. NanoTech Gaming | Alternus Energy vs. Levi Strauss Co | Alternus Energy vs. Boot Barn Holdings |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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