Correlation Between Highway Holdings and Neogen
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Neogen 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 Neogen 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 Neogen, you can compare the effects of market volatilities on Highway Holdings and Neogen 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 Neogen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Neogen.
Diversification Opportunities for Highway Holdings and Neogen
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Highway and Neogen is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Neogen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Neogen 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 Neogen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Neogen has no effect on the direction of Highway Holdings i.e., Highway Holdings and Neogen go up and down completely randomly.
Pair Corralation between Highway Holdings and Neogen
Given the investment horizon of 90 days Highway Holdings Limited is expected to under-perform the Neogen. In addition to that, Highway Holdings is 1.25 times more volatile than Neogen. It trades about -0.26 of its total potential returns per unit of risk. Neogen is currently generating about 0.11 per unit of volatility. If you would invest 1,374 in Neogen on August 24, 2024 and sell it today you would earn a total of 84.00 from holding Neogen or generate 6.11% 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. Neogen
Performance |
| Timeline |
| Highway Holdings |
| Neogen |
Highway Holdings and Neogen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and Neogen
The main advantage of trading using opposite Highway Holdings and Neogen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Neogen 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 Neogen will offset losses from the drop in Neogen'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 |
| Neogen vs. Qiagen NV | Neogen vs. Aclaris Therapeutics | Neogen vs. IQVIA Holdings | Neogen vs. Medpace 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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