Correlation Between Highway Holdings and PROSHARES ULTRASHORT
Can any of the company-specific risk be diversified away by investing in both Highway Holdings and PROSHARES ULTRASHORT 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 PROSHARES ULTRASHORT 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 PROSHARES ULTRASHORT RUSSELL, you can compare the effects of market volatilities on Highway Holdings and PROSHARES ULTRASHORT 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 PROSHARES ULTRASHORT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highway Holdings and PROSHARES ULTRASHORT.
Diversification Opportunities for Highway Holdings and PROSHARES ULTRASHORT
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Highway and PROSHARES is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Highway Holdings Limited and PROSHARES ULTRASHORT RUSSELL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PROSHARES ULTRASHORT 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 PROSHARES ULTRASHORT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PROSHARES ULTRASHORT has no effect on the direction of Highway Holdings i.e., Highway Holdings and PROSHARES ULTRASHORT go up and down completely randomly.
Pair Corralation between Highway Holdings and PROSHARES ULTRASHORT
Given the investment horizon of 90 days Highway Holdings Limited is expected to under-perform the PROSHARES ULTRASHORT. But the stock apears to be less risky and, when comparing its historical volatility, Highway Holdings Limited is 1.85 times less risky than PROSHARES ULTRASHORT. The stock trades about -0.31 of its potential returns per unit of risk. The PROSHARES ULTRASHORT RUSSELL is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 42.00 in PROSHARES ULTRASHORT RUSSELL on August 28, 2025 and sell it today you would lose (9.00) from holding PROSHARES ULTRASHORT RUSSELL or give up 21.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.44% |
| Values | Daily Returns |
Highway Holdings Limited vs. PROSHARES ULTRASHORT RUSSELL
Performance |
| Timeline |
| Highway Holdings |
| PROSHARES ULTRASHORT |
Highway Holdings and PROSHARES ULTRASHORT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highway Holdings and PROSHARES ULTRASHORT
The main advantage of trading using opposite Highway Holdings and PROSHARES ULTRASHORT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highway Holdings position performs unexpectedly, PROSHARES ULTRASHORT 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 PROSHARES ULTRASHORT will offset losses from the drop in PROSHARES ULTRASHORT's long position.| Highway Holdings vs. Astral Foods Limited | Highway Holdings vs. Tsingtao Brewery | Highway Holdings vs. ScanSource | Highway Holdings vs. The Tinley Beverage |
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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 the Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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