Correlation Between Highlight Communications and Axis Bank
Can any of the company-specific risk be diversified away by investing in both Highlight Communications and Axis Bank 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 Highlight Communications and Axis Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlight Communications AG and Axis Bank Limited, you can compare the effects of market volatilities on Highlight Communications and Axis Bank 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 Highlight Communications with a short position of Axis Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and Axis Bank.
Diversification Opportunities for Highlight Communications and Axis Bank
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Highlight and Axis is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and Axis Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axis Bank Limited and Highlight Communications 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 Highlight Communications AG are associated (or correlated) with Axis Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axis Bank Limited has no effect on the direction of Highlight Communications i.e., Highlight Communications and Axis Bank go up and down completely randomly.
Pair Corralation between Highlight Communications and Axis Bank
Assuming the 90 days trading horizon Highlight Communications AG is expected to generate 1.5 times more return on investment than Axis Bank. However, Highlight Communications is 1.5 times more volatile than Axis Bank Limited. It trades about 0.31 of its potential returns per unit of risk. Axis Bank Limited is currently generating about 0.06 per unit of risk. If you would invest 99.00 in Highlight Communications AG on September 12, 2024 and sell it today you would earn a total of 16.00 from holding Highlight Communications AG or generate 16.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Highlight Communications AG vs. Axis Bank Limited
Performance |
| Timeline |
| Highlight Communications |
| Axis Bank Limited |
Highlight Communications and Axis Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and Axis Bank
The main advantage of trading using opposite Highlight Communications and Axis Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications position performs unexpectedly, Axis Bank 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 Axis Bank will offset losses from the drop in Axis Bank's long position.| Highlight Communications vs. The Walt Disney | Highlight Communications vs. Charter Communications | Highlight Communications vs. Warner Music Group | Highlight Communications vs. Superior Plus Corp |
| Axis Bank vs. Highlight Communications AG | Axis Bank vs. Tower One Wireless | Axis Bank vs. Entravision Communications | Axis Bank vs. Cogent Communications Holdings |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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