Correlation Between Highland Longshort and Federated International
Can any of the company-specific risk be diversified away by investing in both Highland Longshort and Federated International 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 Federated International 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 International Leaders, you can compare the effects of market volatilities on Highland Longshort and Federated International 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 Federated International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Longshort and Federated International.
Diversification Opportunities for Highland Longshort and Federated International
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Highland and Federated is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and Federated International Leader in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federated International 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 Federated International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federated International has no effect on the direction of Highland Longshort i.e., Highland Longshort and Federated International go up and down completely randomly.
Pair Corralation between Highland Longshort and Federated International
Assuming the 90 days horizon Highland Longshort Healthcare is expected to generate 0.21 times more return on investment than Federated International. However, Highland Longshort Healthcare is 4.72 times less risky than Federated International. It trades about 0.18 of its potential returns per unit of risk. Federated International Leaders is currently generating about 0.04 per unit of risk. If you would invest 1,592 in Highland Longshort Healthcare on November 3, 2024 and sell it today you would earn a total of 70.00 from holding Highland Longshort Healthcare or generate 4.4% 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. Federated International Leader
Performance |
| Timeline |
| Highland Longshort |
| Federated International |
Highland Longshort and Federated International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Longshort and Federated International
The main advantage of trading using opposite Highland Longshort and Federated International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Longshort position performs unexpectedly, Federated International 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 International will offset losses from the drop in Federated International's long position.| Highland Longshort vs. Putnam Global Financials | Highland Longshort vs. Fidelity Advisor Financial | Highland Longshort vs. 1919 Financial Services | Highland Longshort vs. Blackrock Financial Institutions |
| Federated International vs. Ambrus Core Bond | Federated International vs. Chartwell Short Duration | Federated International vs. Mirova Global Green | Federated International vs. Bbh Intermediate Municipal |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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