Correlation Between Highland Long/short and Total Return
Can any of the company-specific risk be diversified away by investing in both Highland Long/short and Total Return 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 Total Return 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 Total Return Fund, you can compare the effects of market volatilities on Highland Long/short and Total Return 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 Total Return. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Long/short and Total Return.
Diversification Opportunities for Highland Long/short and Total Return
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Highland and Total is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and Total Return Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Total Return 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 Total Return. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Total Return has no effect on the direction of Highland Long/short i.e., Highland Long/short and Total Return go up and down completely randomly.
Pair Corralation between Highland Long/short and Total Return
Assuming the 90 days horizon Highland Longshort Healthcare is expected to generate 0.69 times more return on investment than Total Return. However, Highland Longshort Healthcare is 1.45 times less risky than Total Return. It trades about 0.04 of its potential returns per unit of risk. Total Return Fund is currently generating about -0.1 per unit of risk. If you would invest 1,650 in Highland Longshort Healthcare on August 24, 2024 and sell it today you would earn a total of 3.00 from holding Highland Longshort Healthcare or generate 0.18% 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. Total Return Fund
Performance |
| Timeline |
| Highland Long/short |
| Total Return |
Highland Long/short and Total Return Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Long/short and Total Return
The main advantage of trading using opposite Highland Long/short and Total Return positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Long/short position performs unexpectedly, Total Return 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 Total Return will offset losses from the drop in Total Return's long position.| Highland Long/short vs. Real Estate Fund | Highland Long/short vs. Forum Real Estate | Highland Long/short vs. Commonwealth Real Estate | Highland Long/short vs. Virtus Real Estate |
| Total Return vs. Baron Health Care | Total Return vs. Highland Longshort Healthcare | Total Return vs. Invesco Global Health | Total Return vs. Eventide Healthcare Life |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |