Correlation Between Ab Select and Highland Longshort
Can any of the company-specific risk be diversified away by investing in both Ab Select and Highland Longshort 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 Ab Select and Highland Longshort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ab Select Equity and Highland Longshort Healthcare, you can compare the effects of market volatilities on Ab Select and Highland Longshort 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 Ab Select with a short position of Highland Longshort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ab Select and Highland Longshort.
Diversification Opportunities for Ab Select and Highland Longshort
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AUUIX and Highland is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Ab Select Equity and Highland Longshort Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Longshort and Ab Select 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 Ab Select Equity are associated (or correlated) with Highland Longshort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Longshort has no effect on the direction of Ab Select i.e., Ab Select and Highland Longshort go up and down completely randomly.
Pair Corralation between Ab Select and Highland Longshort
Assuming the 90 days horizon Ab Select Equity is expected to generate 3.88 times more return on investment than Highland Longshort. However, Ab Select is 3.88 times more volatile than Highland Longshort Healthcare. It trades about 0.08 of its potential returns per unit of risk. Highland Longshort Healthcare is currently generating about 0.13 per unit of risk. If you would invest 1,644 in Ab Select Equity on October 25, 2024 and sell it today you would earn a total of 594.00 from holding Ab Select Equity or generate 36.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ab Select Equity vs. Highland Longshort Healthcare
Performance |
| Timeline |
| Ab Select Equity |
| Highland Longshort |
Ab Select and Highland Longshort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ab Select and Highland Longshort
The main advantage of trading using opposite Ab Select and Highland Longshort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ab Select position performs unexpectedly, Highland Longshort 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 Highland Longshort will offset losses from the drop in Highland Longshort's long position.| Ab Select vs. Hennessy Large Cap | Ab Select vs. Prudential Financial Services | Ab Select vs. Davis Financial Fund | Ab Select vs. T Rowe Price |
| Highland Longshort vs. Artisan Small Cap | Highland Longshort vs. Nuveen Small Cap | Highland Longshort vs. Smallcap Fund Fka | Highland Longshort vs. Touchstone Small Cap |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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