Correlation Between Highland Long/short and Ms Global
Can any of the company-specific risk be diversified away by investing in both Highland Long/short and Ms 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 Highland Long/short and Ms Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highland Longshort Healthcare and Ms Global Fixed, you can compare the effects of market volatilities on Highland Long/short and Ms 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 Highland Long/short with a short position of Ms Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Long/short and Ms Global.
Diversification Opportunities for Highland Long/short and Ms Global
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Highland and MFIRX is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and Ms Global Fixed in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ms Global Fixed and Highland Long/short 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 Longshort Healthcare are associated (or correlated) with Ms Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ms Global Fixed has no effect on the direction of Highland Long/short i.e., Highland Long/short and Ms Global go up and down completely randomly.
Pair Corralation between Highland Long/short and Ms Global
Assuming the 90 days horizon Highland Longshort Healthcare is expected to generate 1.66 times more return on investment than Ms Global. However, Highland Long/short is 1.66 times more volatile than Ms Global Fixed. It trades about 0.09 of its potential returns per unit of risk. Ms Global Fixed is currently generating about 0.13 per unit of risk. If you would invest 1,423 in Highland Longshort Healthcare on August 29, 2024 and sell it today you would earn a total of 6.00 from holding Highland Longshort Healthcare or generate 0.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Longshort Healthcare vs. Ms Global Fixed
Performance |
| Timeline |
| Highland Long/short |
| Ms Global Fixed |
Highland Long/short and Ms Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Long/short and Ms Global
The main advantage of trading using opposite Highland Long/short and Ms Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Long/short position performs unexpectedly, Ms 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 Ms Global will offset losses from the drop in Ms Global's long position.| Highland Long/short vs. Dreyfus Natural Resources | Highland Long/short vs. Fidelity Advisor Energy | Highland Long/short vs. Short Oil Gas | Highland Long/short vs. Clearbridge Energy Mlp |
| Ms Global vs. Emerging Markets Equity | Ms Global vs. Global E Portfolio | Ms Global vs. Global E Portfolio | Ms Global vs. Global Centrated Portfolio |
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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