Correlation Between Highway Holdings and Electrovaya Common
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Electrovaya Common 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 Electrovaya Common 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 Electrovaya Common Shares, you can compare the effects of market volatilities on Highway Holdings and Electrovaya Common 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 Electrovaya Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Electrovaya Common.
Diversification Opportunities for Highway Holdings and Electrovaya Common
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Highway and Electrovaya is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Electrovaya Common Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Electrovaya Common Shares 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 Electrovaya Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Electrovaya Common Shares has no effect on the direction of Highway Holdings i.e., Highway Holdings and Electrovaya Common go up and down completely randomly.
Pair Corralation between Highway Holdings and Electrovaya Common
Given the investment horizon of 90 days Highway Holdings Limited is expected to generate 1.06 times more return on investment than Electrovaya Common. However, Highway Holdings is 1.06 times more volatile than Electrovaya Common Shares. It trades about 0.0 of its potential returns per unit of risk. Electrovaya Common Shares is currently generating about -0.01 per unit of risk. If you would invest 210.00 in Highway Holdings Limited on September 1, 2024 and sell it today you would lose (12.00) from holding Highway Holdings Limited or give up 5.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highway Holdings Limited vs. Electrovaya Common Shares
Performance |
| Timeline |
| Highway Holdings |
| Electrovaya Common Shares |
Highway Holdings and Electrovaya Common Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and Electrovaya Common
The main advantage of trading using opposite Highway Holdings and Electrovaya Common positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Electrovaya Common 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 Electrovaya Common will offset losses from the drop in Electrovaya Common'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 |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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