Correlation Between Highland Longshort and Ab Discovery
Can any of the company-specific risk be diversified away by investing in both Highland Longshort and Ab Discovery 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 Longshort and Ab Discovery 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 Ab Discovery Growth, you can compare the effects of market volatilities on Highland Longshort and Ab Discovery 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 Longshort with a short position of Ab Discovery. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Longshort and Ab Discovery.
Diversification Opportunities for Highland Longshort and Ab Discovery
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Highland and CHCZX is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and Ab Discovery Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ab Discovery Growth and Highland Longshort 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 Ab Discovery. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ab Discovery Growth has no effect on the direction of Highland Longshort i.e., Highland Longshort and Ab Discovery go up and down completely randomly.
Pair Corralation between Highland Longshort and Ab Discovery
Assuming the 90 days horizon Highland Longshort Healthcare is expected to generate 0.15 times more return on investment than Ab Discovery. However, Highland Longshort Healthcare is 6.47 times less risky than Ab Discovery. It trades about -0.18 of its potential returns per unit of risk. Ab Discovery Growth is currently generating about -0.04 per unit of risk. If you would invest 1,669 in Highland Longshort Healthcare on September 12, 2024 and sell it today you would lose (11.00) from holding Highland Longshort Healthcare or give up 0.66% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Longshort Healthcare vs. Ab Discovery Growth
Performance |
| Timeline |
| Highland Longshort |
| Ab Discovery Growth |
Highland Longshort and Ab Discovery Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Longshort and Ab Discovery
The main advantage of trading using opposite Highland Longshort and Ab Discovery positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Longshort position performs unexpectedly, Ab Discovery 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 Ab Discovery will offset losses from the drop in Ab Discovery's long position.| Highland Longshort vs. Ab Bond Inflation | Highland Longshort vs. Western Asset Municipal | Highland Longshort vs. T Rowe Price | Highland Longshort vs. Doubleline Yield Opportunities |
| Ab Discovery vs. Lord Abbett Health | Ab Discovery vs. Hartford Healthcare Hls | Ab Discovery vs. Highland Longshort Healthcare | Ab Discovery vs. The Gabelli Healthcare |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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