Correlation Between Highland Global and Highland Floating
Can any of the company-specific risk be diversified away by investing in both Highland Global and Highland Floating 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 Highland Global and Highland Floating into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highland Global Allocation and Highland Floating Rate, you can compare the effects of market volatilities on Highland Global and Highland Floating 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 Highland Global with a short position of Highland Floating. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Global and Highland Floating.
Diversification Opportunities for Highland Global and Highland Floating
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Highland and Highland is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Highland Global Allocation and Highland Floating Rate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Floating Rate and Highland Global 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 Highland Global Allocation are associated (or correlated) with Highland Floating. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Floating Rate has no effect on the direction of Highland Global i.e., Highland Global and Highland Floating go up and down completely randomly.
Pair Corralation between Highland Global and Highland Floating
Given the investment horizon of 90 days Highland Global is expected to generate 2.06 times less return on investment than Highland Floating. But when comparing it to its historical volatility, Highland Global Allocation is 2.18 times less risky than Highland Floating. It trades about 0.06 of its potential returns per unit of risk. Highland Floating Rate is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 564.00 in Highland Floating Rate on August 28, 2024 and sell it today you would earn a total of 13.00 from holding Highland Floating Rate or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Highland Global Allocation vs. Highland Floating Rate
Performance |
| Timeline |
| Highland Global Allo |
| Highland Floating Rate |
Highland Global and Highland Floating Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Global and Highland Floating
The main advantage of trading using opposite Highland Global and Highland Floating positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Global position performs unexpectedly, Highland Floating 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 Floating will offset losses from the drop in Highland Floating's long position.| Highland Global vs. Neuberger Berman Next | Highland Global vs. Doubleline Yield Opportunities | Highland Global vs. Doubleline Income Solutions | Highland Global vs. Clough Global Ef |
| Highland Floating vs. Neuberger Berman Next | Highland Floating vs. SRH Total Return | Highland Floating vs. Nuveen Municipal Credit | Highland Floating vs. Doubleline Income Solutions |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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