Correlation Between Highway Holdings and Concrete Pumping

Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Concrete Pumping 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 Concrete Pumping 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 Concrete Pumping Holdings, you can compare the effects of market volatilities on Highway Holdings and Concrete Pumping 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 Concrete Pumping. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Concrete Pumping.

Diversification Opportunities for Highway Holdings and Concrete Pumping

-0.33

Correlation Coefficient

Highway Holdings  Concrete Pumping

Very good diversification

The 3 months correlation between Highway and Concrete is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Concrete Pumping Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Concrete Pumping Holdings 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 Concrete Pumping. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Concrete Pumping Holdings has no effect on the direction of Highway Holdings i.e., Highway Holdings and Concrete Pumping go up and down completely randomly.

Pair Corralation between Highway Holdings and Concrete Pumping

If you would invest  183.00  in Highway Holdings Limited on September 13, 2024 and sell it today you would earn a total of  8.00  from holding Highway Holdings Limited or generate 4.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

Highway Holdings Limited  vs.  Concrete Pumping Holdings

Highway Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Highway Holdings Limited are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical indicators, Highway Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Concrete Pumping Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Concrete Pumping Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Concrete Pumping is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Highway Holdings and Concrete Pumping

The main advantage of trading using opposite Highway Holdings and Concrete Pumping positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Concrete Pumping 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 Concrete Pumping will offset losses from the drop in Concrete Pumping's long position.

The idea behind Highway Holdings Limited and Concrete Pumping Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.