Correlation Between Highway Holdings and Mattel
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Mattel 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 Mattel 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 Mattel Inc, you can compare the effects of market volatilities on Highway Holdings and Mattel 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 Mattel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Mattel.
Diversification Opportunities for Highway Holdings and Mattel
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Highway and Mattel is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Mattel Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mattel Inc 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 Mattel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mattel Inc has no effect on the direction of Highway Holdings i.e., Highway Holdings and Mattel go up and down completely randomly.
Pair Corralation between Highway Holdings and Mattel
Given the investment horizon of 90 days Highway Holdings Limited is expected to generate 1.25 times more return on investment than Mattel. However, Highway Holdings is 1.25 times more volatile than Mattel Inc. It trades about 0.04 of its potential returns per unit of risk. Mattel Inc is currently generating about -0.12 per unit of risk. If you would invest 191.00 in Highway Holdings Limited on October 11, 2024 and sell it today you would earn a total of 2.00 from holding Highway Holdings Limited or generate 1.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highway Holdings Limited vs. Mattel Inc
Performance |
| Timeline |
| Highway Holdings |
| Mattel Inc |
Highway Holdings and Mattel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and Mattel
The main advantage of trading using opposite Highway Holdings and Mattel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Mattel 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 Mattel will offset losses from the drop in Mattel'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 |
| Mattel vs. Funko Inc | Mattel vs. JAKKS Pacific | Mattel vs. Madison Square Garden | Mattel vs. Life Time Group |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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