Correlation Between Highway Holdings and Metalink
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Metalink 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 Metalink 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 Metalink, you can compare the effects of market volatilities on Highway Holdings and Metalink 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 Metalink. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Metalink.
Diversification Opportunities for Highway Holdings and Metalink
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Highway and Metalink is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Metalink in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metalink 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 Metalink. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metalink has no effect on the direction of Highway Holdings i.e., Highway Holdings and Metalink go up and down completely randomly.
Pair Corralation between Highway Holdings and Metalink
Given the investment horizon of 90 days Highway Holdings is expected to generate 77.49 times less return on investment than Metalink. But when comparing it to its historical volatility, Highway Holdings Limited is 23.88 times less risky than Metalink. It trades about 0.02 of its potential returns per unit of risk. Metalink is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 59.00 in Metalink on September 4, 2024 and sell it today you would lose (16.00) from holding Metalink or give up 27.12% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Highway Holdings Limited vs. Metalink
Performance |
| Timeline |
| Highway Holdings |
| Metalink |
Highway Holdings and Metalink Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and Metalink
The main advantage of trading using opposite Highway Holdings and Metalink positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Metalink 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 Metalink will offset losses from the drop in Metalink'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 |
| Metalink vs. Vera Bradley | Metalink vs. Verde Clean Fuels | Metalink vs. Franklin Wireless Corp | Metalink vs. Spectrum Brands Holdings |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |