Correlation Between Highland Long/short and American Century
Can any of the company-specific risk be diversified away by investing in both Highland Long/short and American Century 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 American Century 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 American Century Mid, you can compare the effects of market volatilities on Highland Long/short and American Century 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 American Century. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Long/short and American Century.
Diversification Opportunities for Highland Long/short and American Century
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Highland and American is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and American Century Mid in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Century Mid 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 American Century. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Century Mid has no effect on the direction of Highland Long/short i.e., Highland Long/short and American Century go up and down completely randomly.
Pair Corralation between Highland Long/short and American Century
Assuming the 90 days horizon Highland Long/short is expected to generate 32.22 times less return on investment than American Century. But when comparing it to its historical volatility, Highland Longshort Healthcare is 3.21 times less risky than American Century. It trades about 0.04 of its potential returns per unit of risk. American Century Mid is currently generating about 0.4 of returns per unit of risk over similar time horizon. If you would invest 1,686 in American Century Mid on September 4, 2024 and sell it today you would earn a total of 103.00 from holding American Century Mid or generate 6.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Longshort Healthcare vs. American Century Mid
Performance |
| Timeline |
| Highland Long/short |
| American Century Mid |
Highland Long/short and American Century Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Long/short and American Century
The main advantage of trading using opposite Highland Long/short and American Century positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Long/short position performs unexpectedly, American Century 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 American Century will offset losses from the drop in American Century's long position.| Highland Long/short vs. Angel Oak Financial | Highland Long/short vs. Blrc Sgy Mnp | Highland Long/short vs. Legg Mason Partners | Highland Long/short vs. Federated Pennsylvania Municipal |
| American Century vs. Mid Cap Value | American Century vs. Equity Growth Fund | American Century vs. Income Growth Fund | American Century vs. Diversified Bond Fund |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |