Correlation Between Highland Longshort and Nuveen Strategic
Can any of the company-specific risk be diversified away by investing in both Highland Longshort and Nuveen Strategic 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 Nuveen Strategic 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 Nuveen Strategic Municipal, you can compare the effects of market volatilities on Highland Longshort and Nuveen Strategic 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 Nuveen Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Longshort and Nuveen Strategic.
Diversification Opportunities for Highland Longshort and Nuveen Strategic
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Highland and Nuveen is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and Nuveen Strategic Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nuveen Strategic Mun 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 Nuveen Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nuveen Strategic Mun has no effect on the direction of Highland Longshort i.e., Highland Longshort and Nuveen Strategic go up and down completely randomly.
Pair Corralation between Highland Longshort and Nuveen Strategic
Assuming the 90 days horizon Highland Longshort Healthcare is expected to generate 0.74 times more return on investment than Nuveen Strategic. However, Highland Longshort Healthcare is 1.36 times less risky than Nuveen Strategic. It trades about 0.33 of its potential returns per unit of risk. Nuveen Strategic Municipal is currently generating about 0.14 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 21.00 from holding Highland Longshort Healthcare or generate 1.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Longshort Healthcare vs. Nuveen Strategic Municipal
Performance |
| Timeline |
| Highland Longshort |
| Nuveen Strategic Mun |
Highland Longshort and Nuveen Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Longshort and Nuveen Strategic
The main advantage of trading using opposite Highland Longshort and Nuveen Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Longshort position performs unexpectedly, Nuveen Strategic 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 Nuveen Strategic will offset losses from the drop in Nuveen Strategic's long position.| Highland Longshort vs. Dreyfus Government Cash | Highland Longshort vs. Franklin Adjustable Government | Highland Longshort vs. Voya Government Money | Highland Longshort vs. Intermediate Government Bond |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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