Correlation Between Highway Holdings and Interactive Strength
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Interactive Strength 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 Interactive Strength 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 Interactive Strength Common, you can compare the effects of market volatilities on Highway Holdings and Interactive Strength 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 Interactive Strength. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Interactive Strength.
Diversification Opportunities for Highway Holdings and Interactive Strength
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Highway and Interactive is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Interactive Strength Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interactive Strength 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 Interactive Strength. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interactive Strength has no effect on the direction of Highway Holdings i.e., Highway Holdings and Interactive Strength go up and down completely randomly.
Pair Corralation between Highway Holdings and Interactive Strength
Given the investment horizon of 90 days Highway Holdings Limited is expected to generate 0.32 times more return on investment than Interactive Strength. However, Highway Holdings Limited is 3.16 times less risky than Interactive Strength. It trades about 0.02 of its potential returns per unit of risk. Interactive Strength Common is currently generating about -0.19 per unit of risk. If you would invest 188.00 in Highway Holdings Limited on September 15, 2024 and sell it today you would earn a total of 2.00 from holding Highway Holdings Limited or generate 1.06% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Highway Holdings Limited vs. Interactive Strength Common
Performance |
Timeline |
Highway Holdings |
Interactive Strength |
Highway Holdings and Interactive Strength Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Highway Holdings and Interactive Strength
The main advantage of trading using opposite Highway Holdings and Interactive Strength positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Interactive Strength 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 Interactive Strength will offset losses from the drop in Interactive Strength's 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 |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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