Correlation Between Highway Holdings and Grace Therapeutics,

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

Diversification Opportunities for Highway Holdings and Grace Therapeutics,

0.11

Correlation Coefficient

Highway Holdings  Grace Therapeutics,

Average diversification

The 3 months correlation between Highway and Grace is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Grace Therapeutics, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grace Therapeutics, 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 Grace Therapeutics,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grace Therapeutics, has no effect on the direction of Highway Holdings i.e., Highway Holdings and Grace Therapeutics, go up and down completely randomly.

Pair Corralation between Highway Holdings and Grace Therapeutics,

Given the investment horizon of 90 days Highway Holdings is expected to generate 3.15 times less return on investment than Grace Therapeutics,. But when comparing it to its historical volatility, Highway Holdings Limited is 1.61 times less risky than Grace Therapeutics,. It trades about 0.01 of its potential returns per unit of risk. Grace Therapeutics, is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  426.00  in Grace Therapeutics, on October 22, 2024 and sell it today you would lose (60.00) from holding Grace Therapeutics, or give up 14.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.6%
Values	Daily Returns

Highway Holdings Limited  vs.  Grace Therapeutics,

Highway Holdings

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Highway Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Grace Therapeutics,

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Grace Therapeutics, are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Grace Therapeutics, exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Highway Holdings and Grace Therapeutics,

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

The idea behind Highway Holdings Limited and Grace Therapeutics, 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.

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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.