Correlation Between Highland Long/short and Columbia Mid
Can any of the company-specific risk be diversified away by investing in both Highland Long/short and Columbia Mid 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 Columbia Mid 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 Columbia Mid Cap, you can compare the effects of market volatilities on Highland Long/short and Columbia Mid 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 Columbia Mid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Long/short and Columbia Mid.
Diversification Opportunities for Highland Long/short and Columbia Mid
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Highland and Columbia is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and Columbia Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Columbia Mid Cap 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 Columbia Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Columbia Mid Cap has no effect on the direction of Highland Long/short i.e., Highland Long/short and Columbia Mid go up and down completely randomly.
Pair Corralation between Highland Long/short and Columbia Mid
Assuming the 90 days horizon Highland Long/short is expected to generate 3.58 times less return on investment than Columbia Mid. But when comparing it to its historical volatility, Highland Longshort Healthcare is 4.04 times less risky than Columbia Mid. It trades about 0.24 of its potential returns per unit of risk. Columbia Mid Cap is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,349 in Columbia Mid Cap on September 4, 2024 and sell it today you would earn a total of 196.00 from holding Columbia Mid Cap or generate 14.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.82% |
| Values | Daily Returns |
Highland Longshort Healthcare vs. Columbia Mid Cap
Performance |
| Timeline |
| Highland Long/short |
| Columbia Mid Cap |
Highland Long/short and Columbia Mid Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Long/short and Columbia Mid
The main advantage of trading using opposite Highland Long/short and Columbia Mid positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Long/short position performs unexpectedly, Columbia Mid 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 Columbia Mid will offset losses from the drop in Columbia Mid'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 |
| Columbia Mid vs. First Eagle Gold | Columbia Mid vs. Vy Goldman Sachs | Columbia Mid vs. International Investors Gold | Columbia Mid vs. Short Precious Metals |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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