Correlation Between Highway Holdings and TH International
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and TH International 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 TH International 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 TH International Limited, you can compare the effects of market volatilities on Highway Holdings and TH International 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 TH International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and TH International.
Diversification Opportunities for Highway Holdings and TH International
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Highway and THCH is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and TH International Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TH International 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 TH International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TH International has no effect on the direction of Highway Holdings i.e., Highway Holdings and TH International go up and down completely randomly.
Pair Corralation between Highway Holdings and TH International
Given the investment horizon of 90 days Highway Holdings Limited is expected to generate 0.57 times more return on investment than TH International. However, Highway Holdings Limited is 1.74 times less risky than TH International. It trades about -0.02 of its potential returns per unit of risk. TH International Limited is currently generating about -0.05 per unit of risk. If you would invest 267.00 in Highway Holdings Limited on September 12, 2024 and sell it today you would lose (71.00) from holding Highway Holdings Limited or give up 26.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.46% |
| Values | Daily Returns |
Highway Holdings Limited vs. TH International Limited
Performance |
| Timeline |
| Highway Holdings |
| TH International |
Highway Holdings and TH International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and TH International
The main advantage of trading using opposite Highway Holdings and TH International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, TH International 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 TH International will offset losses from the drop in TH International'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 |
| TH International vs. Potbelly Co | TH International vs. El Pollo Loco | TH International vs. Dine Brands Global | TH International vs. One Group Hospitality |
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
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |