Correlation Between Highway Holdings and Yum Brands
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Yum Brands 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 Yum Brands 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 Yum Brands, you can compare the effects of market volatilities on Highway Holdings and Yum Brands 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 Yum Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Yum Brands.
Diversification Opportunities for Highway Holdings and Yum Brands
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Highway and Yum is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Yum Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yum Brands 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 Yum Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yum Brands has no effect on the direction of Highway Holdings i.e., Highway Holdings and Yum Brands go up and down completely randomly.
Pair Corralation between Highway Holdings and Yum Brands
If you would invest 13,983 in Yum Brands on September 3, 2024 and sell it today you would lose (89.00) from holding Yum Brands or give up 0.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highway Holdings Limited vs. Yum Brands
Performance |
| Timeline |
| Highway Holdings |
| Yum Brands |
Highway Holdings and Yum Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and Yum Brands
The main advantage of trading using opposite Highway Holdings and Yum Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Yum Brands 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 Yum Brands will offset losses from the drop in Yum Brands' long position.| Highway Holdings vs. Deswell Industries | Highway Holdings vs. SCOR PK | Highway Holdings vs. HUMANA INC | Highway Holdings vs. Aquagold International |
| Yum Brands vs. Highway Holdings Limited | Yum Brands vs. QCR Holdings | Yum Brands vs. Partner Communications | Yum Brands vs. Acumen Pharmaceuticals |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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