Correlation Between Capital Income and Highland Global
Can any of the company-specific risk be diversified away by investing in both Capital Income and Highland Global 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 Capital Income and Highland Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Income Builder and Highland Global Allocation, you can compare the effects of market volatilities on Capital Income and Highland Global 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 Capital Income with a short position of Highland Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Income and Highland Global.
Diversification Opportunities for Capital Income and Highland Global
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Capital and Highland is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Capital Income Builder and Highland Global Allocation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Global Allo and Capital Income 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 Capital Income Builder are associated (or correlated) with Highland Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Global Allo has no effect on the direction of Capital Income i.e., Capital Income and Highland Global go up and down completely randomly.
Pair Corralation between Capital Income and Highland Global
If you would invest 0.00 in Capital Income Builder on August 25, 2024 and sell it today you would earn a total of 0.00 from holding Capital Income Builder or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.35% |
| Values | Daily Returns |
Capital Income Builder vs. Highland Global Allocation
Performance |
| Timeline |
| Capital Income Builder |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| Highland Global Allo |
Capital Income and Highland Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Income and Highland Global
The main advantage of trading using opposite Capital Income and Highland Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Income position performs unexpectedly, Highland Global 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 Global will offset losses from the drop in Highland Global's long position.| Capital Income vs. Ab Bond Inflation | Capital Income vs. Loomis Sayles Inflation | Capital Income vs. Ab Municipal Bond | Capital Income vs. Fidelity Sai Inflationfocused |
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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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