Correlation Between Highway Holdings and Amer Sports,

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

Diversification Opportunities for Highway Holdings and Amer Sports,

0.01

Correlation Coefficient

Highway Holdings  Amer Sports,

Significant diversification

The 3 months correlation between Highway and Amer is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Amer Sports, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amer Sports, 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 Amer Sports,. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amer Sports, has no effect on the direction of Highway Holdings i.e., Highway Holdings and Amer Sports, go up and down completely randomly.

Pair Corralation between Highway Holdings and Amer Sports,

Given the investment horizon of 90 days Highway Holdings Limited is expected to under-perform the Amer Sports,. But the stock apears to be less risky and, when comparing its historical volatility, Highway Holdings Limited is 1.75 times less risky than Amer Sports,. The stock trades about -0.06 of its potential returns per unit of risk. The Amer Sports, is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest  2,551  in Amer Sports, on September 24, 2024 and sell it today you would earn a total of  267.00  from holding Amer Sports, or generate 10.47% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Highway Holdings Limited  vs.  Amer Sports,

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.

Amer Sports,

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Amer Sports, are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Amer Sports, unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Highway Holdings and Amer Sports,

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

The idea behind Highway Holdings Limited and Amer Sports, 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..