Correlation Between Logility Supply and Highway Holdings
Can any of the company-specific risk be diversified away by investing in both Logility Supply and Highway Holdings 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 Logility Supply and Highway Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Logility Supply Chain and Highway Holdings Limited, you can compare the effects of market volatilities on Logility Supply and Highway Holdings 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 Logility Supply with a short position of Highway Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Logility Supply and Highway Holdings.
Diversification Opportunities for Logility Supply and Highway Holdings
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Logility and Highway is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Logility Supply Chain and Highway Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highway Holdings and Logility Supply 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 Logility Supply Chain are associated (or correlated) with Highway Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highway Holdings has no effect on the direction of Logility Supply i.e., Logility Supply and Highway Holdings go up and down completely randomly.
Pair Corralation between Logility Supply and Highway Holdings
Given the investment horizon of 90 days Logility Supply is expected to generate 1.78 times less return on investment than Highway Holdings. But when comparing it to its historical volatility, Logility Supply Chain is 1.11 times less risky than Highway Holdings. It trades about 0.01 of its potential returns per unit of risk. Highway Holdings Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 180.00 in Highway Holdings Limited on October 11, 2024 and sell it today you would earn a total of 13.00 from holding Highway Holdings Limited or generate 7.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.3% |
| Values | Daily Returns |
Logility Supply Chain vs. Highway Holdings Limited
Performance |
| Timeline |
| Logility Supply Chain |
| Highway Holdings |
Logility Supply and Highway Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Logility Supply and Highway Holdings
The main advantage of trading using opposite Logility Supply and Highway Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Logility Supply position performs unexpectedly, Highway Holdings 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 Highway Holdings will offset losses from the drop in Highway Holdings' long position.| Logility Supply vs. ASML Holding NV | Logility Supply vs. Arm Holdings plc | Logility Supply vs. IPG Photonics | Logility Supply vs. Sealed Air |
| Highway Holdings vs. Deswell Industries | Highway Holdings vs. Euro Tech Holdings | Highway Holdings vs. China Natural Resources | Highway Holdings vs. Arts Way Manufacturing Co |
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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