Correlation Between Highway Hlds and Aeroclean Technologies

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Can any of the company-specific risk be diversified away by investing in both Highway Hlds and Aeroclean Technologies 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 Hlds and Aeroclean Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highway Hlds and Aeroclean Technologies, you can compare the effects of market volatilities on Highway Hlds and Aeroclean Technologies 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 Hlds with a short position of Aeroclean Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Hlds and Aeroclean Technologies.

Diversification Opportunities for Highway Hlds and Aeroclean Technologies

0.06
  Correlation Coefficient

Significant diversification

The 3 months correlation between Highway and Aeroclean is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Highway Hlds and Aeroclean Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aeroclean Technologies and Highway Hlds 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 Hlds are associated (or correlated) with Aeroclean Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aeroclean Technologies has no effect on the direction of Highway Hlds i.e., Highway Hlds and Aeroclean Technologies go up and down completely randomly.

Pair Corralation between Highway Hlds and Aeroclean Technologies

Given the investment horizon of 90 days Highway Hlds is expected to generate 22.18 times less return on investment than Aeroclean Technologies. But when comparing it to its historical volatility, Highway Hlds is 5.72 times less risky than Aeroclean Technologies. It trades about 0.02 of its potential returns per unit of risk. Aeroclean Technologies is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  237.00  in Aeroclean Technologies on September 1, 2022 and sell it today you would earn a total of  107.00  from holding Aeroclean Technologies or generate 45.15% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Highway Hlds  vs.  Aeroclean Technologies

 Performance (%) 
       Timeline  
Highway Hlds 
Highway Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Highway Hlds are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent technical indicators, Highway Hlds is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Highway Price Channel

Aeroclean Technologies 
Aeroclean Performance
4 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Aeroclean Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aeroclean Technologies sustained solid returns over the last few months and may actually be approaching a breakup point.

Aeroclean Price Channel

Highway Hlds and Aeroclean Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Highway Hlds and Aeroclean Technologies

The main advantage of trading using opposite Highway Hlds and Aeroclean Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Hlds position performs unexpectedly, Aeroclean Technologies 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 Aeroclean Technologies will offset losses from the drop in Aeroclean Technologies' long position.
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The idea behind Highway Hlds and Aeroclean Technologies 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 Analyst Recommendations module to analyst recommendations and target price estimates broken down by several categories.

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