Correlation Between Highway Holdings and Apogee Enterprises
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Apogee Enterprises 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 Apogee Enterprises 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 Apogee Enterprises, you can compare the effects of market volatilities on Highway Holdings and Apogee Enterprises 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 Apogee Enterprises. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Apogee Enterprises.
Diversification Opportunities for Highway Holdings and Apogee Enterprises
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Highway and Apogee is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Apogee Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apogee Enterprises 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 Apogee Enterprises. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apogee Enterprises has no effect on the direction of Highway Holdings i.e., Highway Holdings and Apogee Enterprises go up and down completely randomly.
Pair Corralation between Highway Holdings and Apogee Enterprises
Given the investment horizon of 90 days Highway Holdings is expected to generate 7.0 times less return on investment than Apogee Enterprises. In addition to that, Highway Holdings is 1.14 times more volatile than Apogee Enterprises. It trades about 0.01 of its total potential returns per unit of risk. Apogee Enterprises is currently generating about 0.09 per unit of volatility. If you would invest 5,257 in Apogee Enterprises on August 25, 2024 and sell it today you would earn a total of 3,065 from holding Apogee Enterprises or generate 58.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.13% |
| Values | Daily Returns |
Highway Holdings Limited vs. Apogee Enterprises
Performance |
| Timeline |
| Highway Holdings |
| Apogee Enterprises |
Highway Holdings and Apogee Enterprises Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and Apogee Enterprises
The main advantage of trading using opposite Highway Holdings and Apogee Enterprises positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Apogee Enterprises 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 Apogee Enterprises will offset losses from the drop in Apogee Enterprises' long position.| Highway Holdings vs. CompoSecure | Highway Holdings vs. Dave Warrants | Highway Holdings vs. Evolv Technologies Holdings | Highway Holdings vs. Aquagold International |
| Apogee Enterprises vs. Trex Company | Apogee Enterprises vs. Armstrong World Industries | Apogee Enterprises vs. Gibraltar Industries | Apogee Enterprises vs. Travis Perkins PLC |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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