Correlation Between Highway Holdings and ApeCoin

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

Diversification Opportunities for Highway Holdings and ApeCoin

-0.09
  Correlation Coefficient

Good diversification

The 3 months correlation between Highway and ApeCoin is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and ApeCoin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ApeCoin 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 ApeCoin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ApeCoin has no effect on the direction of Highway Holdings i.e., Highway Holdings and ApeCoin go up and down completely randomly.

Pair Corralation between Highway Holdings and ApeCoin

Given the investment horizon of 90 days Highway Holdings Limited is expected to generate 0.36 times more return on investment than ApeCoin. However, Highway Holdings Limited is 2.79 times less risky than ApeCoin. It trades about 0.25 of its potential returns per unit of risk. ApeCoin is currently generating about 0.04 per unit of risk. If you would invest  204.00  in Highway Holdings Limited on September 6, 2022 and sell it today you would earn a total of  36.00  from holding Highway Holdings Limited or generate 17.65% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy95.24%
ValuesDaily Returns

Highway Holdings Limited  vs.  ApeCoin

 Performance (%) 
       Timeline  
Highway Holdings 
Highway Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Highway Holdings Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite weak technical indicators, Highway Holdings may actually be approaching a critical reversion point that can send shares even higher in January 2023.

Highway Price Channel

ApeCoin 
ApeCoin Performance
0 of 100
Over the last 90 days ApeCoin has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ApeCoin is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

ApeCoin Price Channel

Highway Holdings and ApeCoin Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Highway Holdings and ApeCoin

The main advantage of trading using opposite Highway Holdings and ApeCoin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, ApeCoin 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 ApeCoin will offset losses from the drop in ApeCoin's long position.
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The idea behind Highway Holdings Limited and ApeCoin 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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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.

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