Correlation Between Highway Holdings and NORFOLK
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By analyzing existing cross correlation between Highway Holdings Limited and NORFOLK SOUTHN P, you can compare the effects of market volatilities on Highway Holdings and NORFOLK 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 NORFOLK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and NORFOLK.
Diversification Opportunities for Highway Holdings and NORFOLK
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Highway and NORFOLK is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and NORFOLK SOUTHN P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORFOLK SOUTHN P 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 NORFOLK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORFOLK SOUTHN P has no effect on the direction of Highway Holdings i.e., Highway Holdings and NORFOLK go up and down completely randomly.
Pair Corralation between Highway Holdings and NORFOLK
Given the investment horizon of 90 days Highway Holdings Limited is expected to generate 2.14 times more return on investment than NORFOLK. However, Highway Holdings is 2.14 times more volatile than NORFOLK SOUTHN P. It trades about 0.15 of its potential returns per unit of risk. NORFOLK SOUTHN P is currently generating about -0.06 per unit of risk. If you would invest 188.00 in Highway Holdings Limited on October 9, 2024 and sell it today you would earn a total of 8.00 from holding Highway Holdings Limited or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 52.63% |
| Values | Daily Returns |
Highway Holdings Limited vs. NORFOLK SOUTHN P
Performance |
| Timeline |
| Highway Holdings |
| NORFOLK SOUTHN P |
Highway Holdings and NORFOLK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and NORFOLK
The main advantage of trading using opposite Highway Holdings and NORFOLK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, NORFOLK 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 NORFOLK will offset losses from the drop in NORFOLK'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 |
| NORFOLK vs. Air Lease | NORFOLK vs. AerCap Holdings NV | NORFOLK vs. Flexible Solutions International | NORFOLK vs. Hertz Global Hldgs |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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