Correlation Between Highway Holdings and AMCON Distributing
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and AMCON Distributing 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 AMCON Distributing 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 AMCON Distributing, you can compare the effects of market volatilities on Highway Holdings and AMCON Distributing 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 AMCON Distributing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and AMCON Distributing.
Diversification Opportunities for Highway Holdings and AMCON Distributing
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Highway and AMCON is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and AMCON Distributing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMCON Distributing 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 AMCON Distributing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMCON Distributing has no effect on the direction of Highway Holdings i.e., Highway Holdings and AMCON Distributing go up and down completely randomly.
Pair Corralation between Highway Holdings and AMCON Distributing
Given the investment horizon of 90 days Highway Holdings is expected to generate 3.69 times less return on investment than AMCON Distributing. But when comparing it to its historical volatility, Highway Holdings Limited is 4.25 times less risky than AMCON Distributing. It trades about 0.1 of its potential returns per unit of risk. AMCON Distributing is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 13,285 in AMCON Distributing on September 5, 2024 and sell it today you would earn a total of 1,015 from holding AMCON Distributing or generate 7.64% 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. AMCON Distributing
Performance |
| Timeline |
| Highway Holdings |
| AMCON Distributing |
Highway Holdings and AMCON Distributing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and AMCON Distributing
The main advantage of trading using opposite Highway Holdings and AMCON Distributing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, AMCON Distributing 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 AMCON Distributing will offset losses from the drop in AMCON Distributing'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 |
| AMCON Distributing vs. The Chefs Warehouse | AMCON Distributing vs. G Willi Food International | AMCON Distributing vs. SpartanNash Co | AMCON Distributing vs. Calavo Growers |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |