Correlation Between Highland Small-cap and Sa Us
Can any of the company-specific risk be diversified away by investing in both Highland Small-cap and Sa Us 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 Small-cap and Sa Us into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highland Small Cap Equity and Sa Value, you can compare the effects of market volatilities on Highland Small-cap and Sa Us 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 Small-cap with a short position of Sa Us. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Small-cap and Sa Us.
Diversification Opportunities for Highland Small-cap and Sa Us
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Highland and SABTX is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Highland Small Cap Equity and Sa Value in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sa Value and Highland Small-cap 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 Small Cap Equity are associated (or correlated) with Sa Us. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sa Value has no effect on the direction of Highland Small-cap i.e., Highland Small-cap and Sa Us go up and down completely randomly.
Pair Corralation between Highland Small-cap and Sa Us
Assuming the 90 days horizon Highland Small-cap is expected to generate 1.26 times less return on investment than Sa Us. But when comparing it to its historical volatility, Highland Small Cap Equity is 1.43 times less risky than Sa Us. It trades about 0.32 of its potential returns per unit of risk. Sa Value is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 2,276 in Sa Value on September 2, 2024 and sell it today you would earn a total of 143.00 from holding Sa Value or generate 6.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Small Cap Equity vs. Sa Value
Performance |
| Timeline |
| Highland Small Cap |
| Sa Value |
Highland Small-cap and Sa Us Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Small-cap and Sa Us
The main advantage of trading using opposite Highland Small-cap and Sa Us positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Small-cap position performs unexpectedly, Sa Us 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 Sa Us will offset losses from the drop in Sa Us' long position.The idea behind Highland Small Cap Equity and Sa Value pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
| Sa Us vs. Sa Small Company | Sa Us vs. Sa Mkt Fd | Sa Us vs. Sa International Value | Sa Us vs. Sa International Small |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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