Correlation Between Highway Holdings and Centessa Pharmaceuticals
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals 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 Centessa Pharmaceuticals PLC, you can compare the effects of market volatilities on Highway Holdings and Centessa Pharmaceuticals 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 Centessa Pharmaceuticals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Centessa Pharmaceuticals.
Diversification Opportunities for Highway Holdings and Centessa Pharmaceuticals
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Highway and Centessa is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Centessa Pharmaceuticals PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centessa Pharmaceuticals 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 Centessa Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centessa Pharmaceuticals has no effect on the direction of Highway Holdings i.e., Highway Holdings and Centessa Pharmaceuticals go up and down completely randomly.
Pair Corralation between Highway Holdings and Centessa Pharmaceuticals
Given the investment horizon of 90 days Highway Holdings is expected to generate 5.07 times less return on investment than Centessa Pharmaceuticals. But when comparing it to its historical volatility, Highway Holdings Limited is 3.2 times less risky than Centessa Pharmaceuticals. It trades about 0.15 of its potential returns per unit of risk. Centessa Pharmaceuticals PLC is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 1,504 in Centessa Pharmaceuticals PLC on September 1, 2024 and sell it today you would earn a total of 287.00 from holding Centessa Pharmaceuticals PLC or generate 19.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highway Holdings Limited vs. Centessa Pharmaceuticals PLC
Performance |
| Timeline |
| Highway Holdings |
| Centessa Pharmaceuticals |
Highway Holdings and Centessa Pharmaceuticals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and Centessa Pharmaceuticals
The main advantage of trading using opposite Highway Holdings and Centessa Pharmaceuticals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Centessa Pharmaceuticals 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 Centessa Pharmaceuticals will offset losses from the drop in Centessa Pharmaceuticals' 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 |
| Centessa Pharmaceuticals vs. Tff Pharmaceuticals | Centessa Pharmaceuticals vs. Eliem Therapeutics | Centessa Pharmaceuticals vs. Inhibrx | Centessa Pharmaceuticals vs. Enliven Therapeutics |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |