Correlation Between Highway Holdings and Azure Holding
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Azure Holding 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 Azure Holding 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 Azure Holding Group, you can compare the effects of market volatilities on Highway Holdings and Azure Holding 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 Azure Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Azure Holding.
Diversification Opportunities for Highway Holdings and Azure Holding
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Highway and Azure is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Azure Holding Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azure Holding 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 Azure Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azure Holding Group has no effect on the direction of Highway Holdings i.e., Highway Holdings and Azure Holding go up and down completely randomly.
Pair Corralation between Highway Holdings and Azure Holding
Given the investment horizon of 90 days Highway Holdings Limited is expected to under-perform the Azure Holding. But the stock apears to be less risky and, when comparing its historical volatility, Highway Holdings Limited is 10.57 times less risky than Azure Holding. The stock trades about -0.08 of its potential returns per unit of risk. The Azure Holding Group is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 10.00 in Azure Holding Group on October 30, 2024 and sell it today you would earn a total of 6.00 from holding Azure Holding Group or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highway Holdings Limited vs. Azure Holding Group
Performance |
| Timeline |
| Highway Holdings |
| Azure Holding Group |
Highway Holdings and Azure Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and Azure Holding
The main advantage of trading using opposite Highway Holdings and Azure Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Azure Holding 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 Azure Holding will offset losses from the drop in Azure Holding'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 |
| Azure Holding vs. Keurig Dr Pepper | Azure Holding vs. Emerson Radio | Azure Holding vs. Ubisoft Entertainment | Azure Holding vs. Mediag3 |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
Other Complementary Tools
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |