Correlation Between Highland Long/short and Prudential Global
Can any of the company-specific risk be diversified away by investing in both Highland Long/short and Prudential Global 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 Prudential Global 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 Prudential Global Total, you can compare the effects of market volatilities on Highland Long/short and Prudential Global 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 Prudential Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Long/short and Prudential Global.
Diversification Opportunities for Highland Long/short and Prudential Global
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Highland and Prudential is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and Prudential Global Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prudential Global Total 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 Prudential Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prudential Global Total has no effect on the direction of Highland Long/short i.e., Highland Long/short and Prudential Global go up and down completely randomly.
Pair Corralation between Highland Long/short and Prudential Global
Assuming the 90 days horizon Highland Long/short is expected to generate 1.08 times less return on investment than Prudential Global. But when comparing it to its historical volatility, Highland Longshort Healthcare is 1.28 times less risky than Prudential Global. It trades about 0.13 of its potential returns per unit of risk. Prudential Global Total is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 751.00 in Prudential Global Total on September 3, 2024 and sell it today you would earn a total of 112.00 from holding Prudential Global Total or generate 14.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Longshort Healthcare vs. Prudential Global Total
Performance |
| Timeline |
| Highland Long/short |
| Prudential Global Total |
Highland Long/short and Prudential Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Long/short and Prudential Global
The main advantage of trading using opposite Highland Long/short and Prudential Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Long/short position performs unexpectedly, Prudential Global 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 Prudential Global will offset losses from the drop in Prudential Global's long position.| Highland Long/short vs. Ab Value Fund | Highland Long/short vs. Balanced Fund Investor | Highland Long/short vs. Rbb Fund | Highland Long/short vs. Omni Small Cap Value |
| Prudential Global vs. Ab Value Fund | Prudential Global vs. Fa 529 Aggressive | Prudential Global vs. Falcon Focus Scv | Prudential Global vs. Rbb 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 Stocks Directory module to find actively traded stocks across global markets.
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