Correlation Between Highway Holdings and Loop Media
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Loop Media 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 Loop Media 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 Loop Media, you can compare the effects of market volatilities on Highway Holdings and Loop Media 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 Loop Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Loop Media.
Diversification Opportunities for Highway Holdings and Loop Media
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Highway and Loop is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Loop Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Loop Media 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 Loop Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Loop Media has no effect on the direction of Highway Holdings i.e., Highway Holdings and Loop Media go up and down completely randomly.
Pair Corralation between Highway Holdings and Loop Media
Given the investment horizon of 90 days Highway Holdings Limited is expected to generate 0.3 times more return on investment than Loop Media. However, Highway Holdings Limited is 3.32 times less risky than Loop Media. It trades about 0.01 of its potential returns per unit of risk. Loop Media is currently generating about -0.06 per unit of risk. If you would invest 221.00 in Highway Holdings Limited on September 4, 2024 and sell it today you would lose (26.00) from holding Highway Holdings Limited or give up 11.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 84.79% |
| Values | Daily Returns |
Highway Holdings Limited vs. Loop Media
Performance |
| Timeline |
| Highway Holdings |
| Loop Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Highway Holdings and Loop Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and Loop Media
The main advantage of trading using opposite Highway Holdings and Loop Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Loop Media 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 Loop Media will offset losses from the drop in Loop Media'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 |
| Loop Media vs. Evolution Gaming Group | Loop Media vs. AKITA Drilling | Loop Media vs. Sphere Entertainment Co | Loop Media vs. Reservoir Media |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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