Correlation Between Highway Holdings and Marine Bancorp
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Marine Bancorp 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 Marine Bancorp 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 Marine Bancorp of, you can compare the effects of market volatilities on Highway Holdings and Marine Bancorp 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 Marine Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Marine Bancorp.
Diversification Opportunities for Highway Holdings and Marine Bancorp
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Highway and Marine is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Marine Bancorp of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marine Bancorp 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 Marine Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marine Bancorp has no effect on the direction of Highway Holdings i.e., Highway Holdings and Marine Bancorp go up and down completely randomly.
Pair Corralation between Highway Holdings and Marine Bancorp
Given the investment horizon of 90 days Highway Holdings Limited is expected to under-perform the Marine Bancorp. In addition to that, Highway Holdings is 5.88 times more volatile than Marine Bancorp of. It trades about -0.18 of its total potential returns per unit of risk. Marine Bancorp of is currently generating about 0.26 per unit of volatility. If you would invest 3,950 in Marine Bancorp of on September 15, 2024 and sell it today you would earn a total of 50.00 from holding Marine Bancorp of or generate 1.27% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 95.45% |
Values | Daily Returns |
Highway Holdings Limited vs. Marine Bancorp of
Performance |
Timeline |
Highway Holdings |
Marine Bancorp |
Highway Holdings and Marine Bancorp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Highway Holdings and Marine Bancorp
The main advantage of trading using opposite Highway Holdings and Marine Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Marine Bancorp 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 Marine Bancorp will offset losses from the drop in Marine Bancorp'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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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