Correlation Between Highway Holdings and Aozora Bank
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Aozora 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 Highway Holdings and Aozora Bank 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 Aozora Bank, you can compare the effects of market volatilities on Highway Holdings and Aozora 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 Highway Holdings with a short position of Aozora Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Aozora Bank.
Diversification Opportunities for Highway Holdings and Aozora Bank
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Highway and Aozora is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Aozora Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aozora Bank 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 Aozora Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aozora Bank has no effect on the direction of Highway Holdings i.e., Highway Holdings and Aozora Bank go up and down completely randomly.
Pair Corralation between Highway Holdings and Aozora Bank
If you would invest 1,989 in Aozora Bank on September 24, 2024 and sell it today you would earn a total of 0.00 from holding Aozora Bank or generate 0.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 4.76% |
Values | Daily Returns |
Highway Holdings Limited vs. Aozora Bank
Performance |
Timeline |
Highway Holdings |
Aozora Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Highway Holdings and Aozora Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Highway Holdings and Aozora Bank
The main advantage of trading using opposite Highway Holdings and Aozora Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Aozora 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 Aozora Bank will offset losses from the drop in Aozora Bank's long position.Highway Holdings vs. Insteel Industries | Highway Holdings vs. Carpenter Technology | Highway Holdings vs. Mueller Industries | Highway Holdings vs. Northwest Pipe |
Aozora Bank vs. Barrick Gold Corp | Aozora Bank vs. Chester Mining | Aozora Bank vs. Doubledown Interactive Co | Aozora Bank vs. Highway Holdings Limited |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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