Correlation Between Highway Holdings and NETGEAR
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and NETGEAR 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 NETGEAR 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 NETGEAR, you can compare the effects of market volatilities on Highway Holdings and NETGEAR 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 NETGEAR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and NETGEAR.
Diversification Opportunities for Highway Holdings and NETGEAR
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Highway and NETGEAR is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and NETGEAR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NETGEAR 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 NETGEAR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NETGEAR has no effect on the direction of Highway Holdings i.e., Highway Holdings and NETGEAR go up and down completely randomly.
Pair Corralation between Highway Holdings and NETGEAR
Given the investment horizon of 90 days Highway Holdings is expected to generate 10.18 times less return on investment than NETGEAR. But when comparing it to its historical volatility, Highway Holdings Limited is 1.27 times less risky than NETGEAR. It trades about 0.01 of its potential returns per unit of risk. NETGEAR is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,432 in NETGEAR on November 3, 2024 and sell it today you would earn a total of 1,333 from holding NETGEAR or generate 93.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Highway Holdings Limited vs. NETGEAR
Performance |
| Timeline |
| Highway Holdings |
| NETGEAR |
Highway Holdings and NETGEAR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and NETGEAR
The main advantage of trading using opposite Highway Holdings and NETGEAR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, NETGEAR 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 NETGEAR will offset losses from the drop in NETGEAR'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 |
| NETGEAR vs. KVH Industries | NETGEAR vs. Ituran Location and | NETGEAR vs. Aviat Networks | NETGEAR vs. Mynaric AG ADR |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |