Correlation Between Highway Holdings and Universal Robina
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Universal Robina 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 Universal Robina 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 Universal Robina, you can compare the effects of market volatilities on Highway Holdings and Universal Robina 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 Universal Robina. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Universal Robina.
Diversification Opportunities for Highway Holdings and Universal Robina
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Highway and Universal is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Universal Robina in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Robina 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 Universal Robina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Robina has no effect on the direction of Highway Holdings i.e., Highway Holdings and Universal Robina go up and down completely randomly.
Pair Corralation between Highway Holdings and Universal Robina
Given the investment horizon of 90 days Highway Holdings Limited is expected to generate 0.18 times more return on investment than Universal Robina. However, Highway Holdings Limited is 5.7 times less risky than Universal Robina. It trades about -0.02 of its potential returns per unit of risk. Universal Robina is currently generating about -0.23 per unit of risk. If you would invest 186.00 in Highway Holdings Limited on November 28, 2024 and sell it today you would lose (1.00) from holding Highway Holdings Limited or give up 0.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Highway Holdings Limited vs. Universal Robina
Performance |
| Timeline |
| Highway Holdings |
| Universal Robina |
Highway Holdings and Universal Robina Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and Universal Robina
The main advantage of trading using opposite Highway Holdings and Universal Robina positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Universal Robina 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 Universal Robina will offset losses from the drop in Universal Robina'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 |
| Universal Robina vs. Thor Industries | Universal Robina vs. McDonalds | Universal Robina vs. Avarone Metals | Universal Robina vs. Kaiser Aluminum |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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