Correlation Between Highway Holdings and HNI Corp
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and HNI Corp 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 HNI Corp 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 HNI Corp, you can compare the effects of market volatilities on Highway Holdings and HNI Corp 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 HNI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and HNI Corp.
Diversification Opportunities for Highway Holdings and HNI Corp
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Highway and HNI is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and HNI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HNI 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 HNI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HNI Corp has no effect on the direction of Highway Holdings i.e., Highway Holdings and HNI Corp go up and down completely randomly.
Pair Corralation between Highway Holdings and HNI Corp
Given the investment horizon of 90 days Highway Holdings is expected to generate 3.26 times less return on investment than HNI Corp. In addition to that, Highway Holdings is 1.6 times more volatile than HNI Corp. It trades about 0.01 of its total potential returns per unit of risk. HNI Corp is currently generating about 0.06 per unit of volatility. If you would invest 3,996 in HNI Corp on November 3, 2024 and sell it today you would earn a total of 989.00 from holding HNI Corp or generate 24.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Highway Holdings Limited vs. HNI Corp
Performance |
| Timeline |
| Highway Holdings |
| HNI Corp |
Highway Holdings and HNI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and HNI Corp
The main advantage of trading using opposite Highway Holdings and HNI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, HNI Corp 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 HNI Corp will offset losses from the drop in HNI Corp'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 |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |