Correlation Between Highland Longshort and Empiric 2500
Can any of the company-specific risk be diversified away by investing in both Highland Longshort and Empiric 2500 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 Empiric 2500 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 Empiric 2500 Fund, you can compare the effects of market volatilities on Highland Longshort and Empiric 2500 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 Empiric 2500. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Longshort and Empiric 2500.
Diversification Opportunities for Highland Longshort and Empiric 2500
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Highland and Empiric is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and Empiric 2500 Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empiric 2500 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 Empiric 2500. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empiric 2500 has no effect on the direction of Highland Longshort i.e., Highland Longshort and Empiric 2500 go up and down completely randomly.
Pair Corralation between Highland Longshort and Empiric 2500
Assuming the 90 days horizon Highland Longshort Healthcare is expected to generate 0.2 times more return on investment than Empiric 2500. However, Highland Longshort Healthcare is 4.89 times less risky than Empiric 2500. It trades about 0.27 of its potential returns per unit of risk. Empiric 2500 Fund is currently generating about 0.04 per unit of risk. If you would invest 1,640 in Highland Longshort Healthcare on October 25, 2024 and sell it today you would earn a total of 16.00 from holding Highland Longshort Healthcare or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Longshort Healthcare vs. Empiric 2500 Fund
Performance |
| Timeline |
| Highland Longshort |
| Empiric 2500 |
Highland Longshort and Empiric 2500 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Longshort and Empiric 2500
The main advantage of trading using opposite Highland Longshort and Empiric 2500 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Longshort position performs unexpectedly, Empiric 2500 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 Empiric 2500 will offset losses from the drop in Empiric 2500's long position.| Highland Longshort vs. Artisan Small Cap | Highland Longshort vs. Nuveen Small Cap | Highland Longshort vs. Smallcap Fund Fka | Highland Longshort vs. Touchstone Small Cap |
| Empiric 2500 vs. Alphacentric Lifesci Healthcare | Empiric 2500 vs. Health Care Ultrasector | Empiric 2500 vs. Tekla Healthcare Investors | Empiric 2500 vs. Lord Abbett Health |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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