Correlation Between Highway Holdings and Top KingWin
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Top KingWin 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 Top KingWin 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 Top KingWin Ltd, you can compare the effects of market volatilities on Highway Holdings and Top KingWin 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 Top KingWin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Top KingWin.
Diversification Opportunities for Highway Holdings and Top KingWin
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Highway and Top is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Top KingWin Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Top KingWin 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 Top KingWin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Top KingWin has no effect on the direction of Highway Holdings i.e., Highway Holdings and Top KingWin go up and down completely randomly.
Pair Corralation between Highway Holdings and Top KingWin
Given the investment horizon of 90 days Highway Holdings Limited is expected to generate 0.31 times more return on investment than Top KingWin. However, Highway Holdings Limited is 3.26 times less risky than Top KingWin. It trades about 0.01 of its potential returns per unit of risk. Top KingWin Ltd is currently generating about -0.04 per unit of risk. If you would invest 209.00 in Highway Holdings Limited on August 31, 2024 and sell it today you would lose (11.00) from holding Highway Holdings Limited or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 92.74% |
| Values | Daily Returns |
Highway Holdings Limited vs. Top KingWin Ltd
Performance |
| Timeline |
| Highway Holdings |
| Top KingWin |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Solid
Highway Holdings and Top KingWin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and Top KingWin
The main advantage of trading using opposite Highway Holdings and Top KingWin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Top KingWin 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 Top KingWin will offset losses from the drop in Top KingWin'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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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