Correlation Between Highway Holdings and Nations VolDex
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Nations VolDex 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 Nations VolDex 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 Nations VolDex, you can compare the effects of market volatilities on Highway Holdings and Nations VolDex 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 Nations VolDex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Nations VolDex.
Diversification Opportunities for Highway Holdings and Nations VolDex
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Highway and Nations is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Nations VolDex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nations VolDex 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 Nations VolDex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nations VolDex has no effect on the direction of Highway Holdings i.e., Highway Holdings and Nations VolDex go up and down completely randomly.
Pair Corralation between Highway Holdings and Nations VolDex
Given the investment horizon of 90 days Highway Holdings Limited is expected to generate 0.88 times more return on investment than Nations VolDex. However, Highway Holdings Limited is 1.14 times less risky than Nations VolDex. It trades about 0.02 of its potential returns per unit of risk. Nations VolDex is currently generating about -0.13 per unit of risk. If you would invest 191.00 in Highway Holdings Limited on September 13, 2024 and sell it today you would lose (2.00) from holding Highway Holdings Limited or give up 1.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Highway Holdings Limited vs. Nations VolDex
Performance |
| Timeline |
Highway Holdings and Nations VolDex Volatility Contrast
Predicted Return Density |
| Returns |
Highway Holdings Limited
Pair trading matchups for Highway Holdings
Nations VolDex
Pair trading matchups for Nations VolDex
Pair Trading with Highway Holdings and Nations VolDex
The main advantage of trading using opposite Highway Holdings and Nations VolDex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Nations VolDex 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 Nations VolDex will offset losses from the drop in Nations VolDex'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 |
| Nations VolDex vs. Vodka Brands Corp | Nations VolDex vs. US Global Investors | Nations VolDex vs. Constellation Brands Class | Nations VolDex vs. Ameriprise Financial |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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