Correlation Between Highway Holdings and Oatly Group
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Oatly Group 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 Oatly Group 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 Oatly Group AB, you can compare the effects of market volatilities on Highway Holdings and Oatly Group 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 Oatly Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Oatly Group.
Diversification Opportunities for Highway Holdings and Oatly Group
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Highway and Oatly is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Oatly Group AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oatly Group AB 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 Oatly Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oatly Group AB has no effect on the direction of Highway Holdings i.e., Highway Holdings and Oatly Group go up and down completely randomly.
Pair Corralation between Highway Holdings and Oatly Group
Given the investment horizon of 90 days Highway Holdings Limited is expected to generate 0.19 times more return on investment than Oatly Group. However, Highway Holdings Limited is 5.32 times less risky than Oatly Group. It trades about 0.17 of its potential returns per unit of risk. Oatly Group AB is currently generating about -0.07 per unit of risk. If you would invest 190.00 in Highway Holdings Limited on September 2, 2024 and sell it today you would earn a total of 8.00 from holding Highway Holdings Limited or generate 4.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highway Holdings Limited vs. Oatly Group AB
Performance |
| Timeline |
| Highway Holdings |
| Oatly Group AB |
Highway Holdings and Oatly Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and Oatly Group
The main advantage of trading using opposite Highway Holdings and Oatly Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Oatly Group 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 Oatly Group will offset losses from the drop in Oatly Group'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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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