Correlation Between Highway Holdings and First Republic
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and First Republic 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 First Republic 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 First Republic Bank, you can compare the effects of market volatilities on Highway Holdings and First Republic 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 First Republic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and First Republic.
Diversification Opportunities for Highway Holdings and First Republic
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Highway and First is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and First Republic Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Republic Bank 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 First Republic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Republic Bank has no effect on the direction of Highway Holdings i.e., Highway Holdings and First Republic go up and down completely randomly.
Pair Corralation between Highway Holdings and First Republic
If you would invest 185.00 in Highway Holdings Limited on September 24, 2024 and sell it today you would earn a total of 5.00 from holding Highway Holdings Limited or generate 2.7% 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. First Republic Bank
Performance |
Timeline |
Highway Holdings |
First Republic Bank |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Highway Holdings and First Republic Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Highway Holdings and First Republic
The main advantage of trading using opposite Highway Holdings and First Republic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, First Republic 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 First Republic will offset losses from the drop in First Republic's long position.Highway Holdings vs. Insteel Industries | Highway Holdings vs. Carpenter Technology | Highway Holdings vs. Mueller Industries | Highway Holdings vs. Northwest Pipe |
First Republic vs. Chewy Inc | First Republic vs. Miniso Group Holding | First Republic vs. Compania Cervecerias Unidas | First Republic vs. Keurig Dr Pepper |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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