Correlation Between Highland Long/short and Federated Bond
Can any of the company-specific risk be diversified away by investing in both Highland Long/short and Federated Bond 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 Federated Bond 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 Federated Bond Fund, you can compare the effects of market volatilities on Highland Long/short and Federated Bond 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 Federated Bond. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Long/short and Federated Bond.
Diversification Opportunities for Highland Long/short and Federated Bond
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Highland and Federated is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and Federated Bond Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated Bond 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 Federated Bond. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated Bond has no effect on the direction of Highland Long/short i.e., Highland Long/short and Federated Bond go up and down completely randomly.
Pair Corralation between Highland Long/short and Federated Bond
Assuming the 90 days horizon Highland Longshort Healthcare is expected to generate 0.58 times more return on investment than Federated Bond. However, Highland Longshort Healthcare is 1.74 times less risky than Federated Bond. It trades about 0.14 of its potential returns per unit of risk. Federated Bond Fund is currently generating about 0.05 per unit of risk. If you would invest 1,430 in Highland Longshort Healthcare on December 4, 2024 and sell it today you would earn a total of 204.00 from holding Highland Longshort Healthcare or generate 14.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Highland Longshort Healthcare vs. Federated Bond Fund
Performance |
| Timeline |
| Highland Long/short |
| Federated Bond |
Highland Long/short and Federated Bond Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Long/short and Federated Bond
The main advantage of trading using opposite Highland Long/short and Federated Bond positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Long/short position performs unexpectedly, Federated Bond 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 Federated Bond will offset losses from the drop in Federated Bond's long position.| Highland Long/short vs. Fuhkbx | Highland Long/short vs. Fbanjx | Highland Long/short vs. Fznopx | Highland Long/short vs. Fdzbpx |
| Federated Bond vs. Ab Bond Inflation | Federated Bond vs. Rbc Impact Bond | Federated Bond vs. Doubleline E Fixed | Federated Bond vs. Intermediate Term 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Money Managers Screen money managers from public funds and ETFs managed around the world |