Correlation Between Highway Holdings and Ark Restaurants
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Ark Restaurants 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 Ark Restaurants 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 Ark Restaurants Corp, you can compare the effects of market volatilities on Highway Holdings and Ark Restaurants 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 Ark Restaurants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Ark Restaurants.
Diversification Opportunities for Highway Holdings and Ark Restaurants
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Highway and Ark is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Ark Restaurants Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ark Restaurants Corp 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 Ark Restaurants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ark Restaurants Corp has no effect on the direction of Highway Holdings i.e., Highway Holdings and Ark Restaurants go up and down completely randomly.
Pair Corralation between Highway Holdings and Ark Restaurants
Given the investment horizon of 90 days Highway Holdings Limited is expected to generate 0.91 times more return on investment than Ark Restaurants. However, Highway Holdings Limited is 1.1 times less risky than Ark Restaurants. It trades about 0.16 of its potential returns per unit of risk. Ark Restaurants Corp is currently generating about -0.26 per unit of risk. If you would invest 191.00 in Highway Holdings Limited on September 3, 2024 and sell it today you would earn a total of 7.00 from holding Highway Holdings Limited or generate 3.66% 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. Ark Restaurants Corp
Performance |
| Timeline |
| Highway Holdings |
| Ark Restaurants Corp |
Highway Holdings and Ark Restaurants Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and Ark Restaurants
The main advantage of trading using opposite Highway Holdings and Ark Restaurants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Ark Restaurants 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 Ark Restaurants will offset losses from the drop in Ark Restaurants' long position.| Highway Holdings vs. Deswell Industries | Highway Holdings vs. SCOR PK | Highway Holdings vs. HUMANA INC | Highway Holdings vs. Aquagold International |
| Ark Restaurants vs. Highway Holdings Limited | Ark Restaurants vs. QCR Holdings | Ark Restaurants vs. Partner Communications | Ark Restaurants vs. Acumen Pharmaceuticals |
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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