Correlation Between Highway Holdings and Plexus Corp
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and Plexus Corp 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 Plexus Corp 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 Plexus Corp, you can compare the effects of market volatilities on Highway Holdings and Plexus Corp 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 Plexus Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and Plexus Corp.
Diversification Opportunities for Highway Holdings and Plexus Corp
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Highway and Plexus is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and Plexus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plexus Corp 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 Plexus Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plexus Corp has no effect on the direction of Highway Holdings i.e., Highway Holdings and Plexus Corp go up and down completely randomly.
Pair Corralation between Highway Holdings and Plexus Corp
Given the investment horizon of 90 days Highway Holdings is expected to generate 2.16 times less return on investment than Plexus Corp. In addition to that, Highway Holdings is 2.24 times more volatile than Plexus Corp. It trades about 0.05 of its total potential returns per unit of risk. Plexus Corp is currently generating about 0.24 per unit of volatility. If you would invest 12,423 in Plexus Corp on September 12, 2024 and sell it today you would earn a total of 4,234 from holding Plexus Corp or generate 34.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Highway Holdings Limited vs. Plexus Corp
Performance |
Timeline |
Highway Holdings |
Plexus Corp |
Highway Holdings and Plexus Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Highway Holdings and Plexus Corp
The main advantage of trading using opposite Highway Holdings and Plexus Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, Plexus Corp 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 Plexus Corp will offset losses from the drop in Plexus Corp'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 |
Plexus Corp vs. Benchmark Electronics | Plexus Corp vs. Flex | Plexus Corp vs. Sanmina | Plexus Corp vs. Bel Fuse A |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
Stocks Directory Find actively traded stocks across global markets | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
Share Portfolio Track or share privately all of your investments from the convenience of any device |