Correlation Between Highway Holdings and KT
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and KT 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 KT 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 KT Corporation, you can compare the effects of market volatilities on Highway Holdings and KT 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 KT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and KT.
Diversification Opportunities for Highway Holdings and KT
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Highway and KT is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and KT Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KT Corporation 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 KT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KT Corporation has no effect on the direction of Highway Holdings i.e., Highway Holdings and KT go up and down completely randomly.
Pair Corralation between Highway Holdings and KT
Given the investment horizon of 90 days Highway Holdings Limited is expected to generate 1.25 times more return on investment than KT. However, Highway Holdings is 1.25 times more volatile than KT Corporation. It trades about 0.01 of its potential returns per unit of risk. KT Corporation is currently generating about -0.1 per unit of risk. If you would invest 181.00 in Highway Holdings Limited on January 5, 2025 and sell it today you would earn a total of 0.00 from holding Highway Holdings Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highway Holdings Limited vs. KT Corp.
Performance |
| Timeline |
| Highway Holdings |
| KT Corporation |
Highway Holdings and KT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and KT
The main advantage of trading using opposite Highway Holdings and KT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, KT 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 KT will offset losses from the drop in KT's long position.| Highway Holdings vs. Insteel Industries | Highway Holdings vs. Carpenter Technology | Highway Holdings vs. Mueller Industries | Highway Holdings vs. Northwest Pipe |
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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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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