Correlation Between Highway Holdings and Scilex Holding
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Scilex Holding 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 Scilex Holding 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 Scilex Holding, you can compare the effects of market volatilities on Highway Holdings and Scilex Holding 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 Scilex Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Scilex Holding.
Diversification Opportunities for Highway Holdings and Scilex Holding
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Highway and Scilex is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Scilex Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scilex Holding 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 Scilex Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scilex Holding has no effect on the direction of Highway Holdings i.e., Highway Holdings and Scilex Holding go up and down completely randomly.
Pair Corralation between Highway Holdings and Scilex Holding
Given the investment horizon of 90 days Highway Holdings is expected to generate 90.13 times less return on investment than Scilex Holding. But when comparing it to its historical volatility, Highway Holdings Limited is 4.62 times less risky than Scilex Holding. It trades about 0.0 of its potential returns per unit of risk. Scilex Holding is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 185.00 in Scilex Holding on September 4, 2024 and sell it today you would lose (156.00) from holding Scilex Holding or give up 84.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.19% |
| Values | Daily Returns |
Highway Holdings Limited vs. Scilex Holding
Performance |
| Timeline |
| Highway Holdings |
| Scilex Holding |
Highway Holdings and Scilex Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and Scilex Holding
The main advantage of trading using opposite Highway Holdings and Scilex Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Scilex Holding 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 Scilex Holding will offset losses from the drop in Scilex Holding'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 |
| Scilex Holding vs. Candel Therapeutics | Scilex Holding vs. Cingulate Warrants | Scilex Holding vs. Unicycive Therapeutics | Scilex Holding vs. Cardio Diagnostics 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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