Correlation Between Highway Holdings and United Parks
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and United Parks 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 United Parks 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 United Parks Resorts, you can compare the effects of market volatilities on Highway Holdings and United Parks 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 United Parks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and United Parks.
Diversification Opportunities for Highway Holdings and United Parks
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Highway and United is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and United Parks Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Parks Resorts 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 United Parks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Parks Resorts has no effect on the direction of Highway Holdings i.e., Highway Holdings and United Parks go up and down completely randomly.
Pair Corralation between Highway Holdings and United Parks
Given the investment horizon of 90 days Highway Holdings Limited is expected to under-perform the United Parks. But the stock apears to be less risky and, when comparing its historical volatility, Highway Holdings Limited is 1.37 times less risky than United Parks. The stock trades about -0.1 of its potential returns per unit of risk. The United Parks Resorts is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 5,687 in United Parks Resorts on September 13, 2024 and sell it today you would lose (117.00) from holding United Parks Resorts or give up 2.06% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highway Holdings Limited vs. United Parks Resorts
Performance |
| Timeline |
| Highway Holdings |
| United Parks Resorts |
Highway Holdings and United Parks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and United Parks
The main advantage of trading using opposite Highway Holdings and United Parks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, United Parks 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 United Parks will offset losses from the drop in United Parks' long position.| Highway Holdings vs. CompoSecure | Highway Holdings vs. Dave Warrants | Highway Holdings vs. Evolv Technologies Holdings | Highway Holdings vs. Aquagold International |
| United Parks vs. Keurig Dr Pepper | United Parks vs. Air Lease | United Parks vs. Vestis | United Parks vs. PepsiCo |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |