Correlation Between Highway Holdings and Cannae Holdings
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Cannae 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 Highway Holdings and Cannae Holdings 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 Cannae Holdings, you can compare the effects of market volatilities on Highway Holdings and Cannae 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 Highway Holdings with a short position of Cannae Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Cannae Holdings.
Diversification Opportunities for Highway Holdings and Cannae Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Highway and Cannae is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Cannae Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cannae 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 Cannae Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cannae Holdings has no effect on the direction of Highway Holdings i.e., Highway Holdings and Cannae Holdings go up and down completely randomly.
Pair Corralation between Highway Holdings and Cannae Holdings
Given the investment horizon of 90 days Highway Holdings Limited is expected to generate 0.58 times more return on investment than Cannae Holdings. However, Highway Holdings Limited is 1.72 times less risky than Cannae Holdings. It trades about -0.05 of its potential returns per unit of risk. Cannae Holdings is currently generating about -0.08 per unit of risk. If you would invest 186.00 in Highway Holdings Limited on December 5, 2024 and sell it today you would lose (2.00) from holding Highway Holdings Limited or give up 1.08% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Highway Holdings Limited vs. Cannae Holdings
Performance |
Timeline |
Highway Holdings |
Cannae Holdings |
Highway Holdings and Cannae Holdings Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Highway Holdings and Cannae Holdings
The main advantage of trading using opposite Highway Holdings and Cannae Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Cannae 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 Cannae Holdings will offset losses from the drop in Cannae Holdings' long position.Highway Holdings vs. Deswell Industries | Highway Holdings vs. Euro Tech Holdings | Highway Holdings vs. China Natural Resources | Highway Holdings vs. Arts Way Manufacturing Co |
Cannae Holdings vs. Adtalem Global Education | Cannae Holdings vs. Hamilton Lane | Cannae Holdings vs. ConnectOne Bancorp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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