Correlation Between Highland Capital and VanEck ETF
Can any of the company-specific risk be diversified away by investing in both Highland Capital and VanEck ETF 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 Capital and VanEck ETF into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highland Capital Management and VanEck ETF Trust, you can compare the effects of market volatilities on Highland Capital and VanEck ETF 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 Capital with a short position of VanEck ETF. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Capital and VanEck ETF.
Diversification Opportunities for Highland Capital and VanEck ETF
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Highland and VanEck is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Highland Capital Management and VanEck ETF Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VanEck ETF Trust and Highland Capital 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 Capital Management are associated (or correlated) with VanEck ETF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VanEck ETF Trust has no effect on the direction of Highland Capital i.e., Highland Capital and VanEck ETF go up and down completely randomly.
Pair Corralation between Highland Capital and VanEck ETF
Given the investment horizon of 90 days Highland Capital Management is expected to generate 3.26 times more return on investment than VanEck ETF. However, Highland Capital is 3.26 times more volatile than VanEck ETF Trust. It trades about 0.14 of its potential returns per unit of risk. VanEck ETF Trust is currently generating about 0.39 per unit of risk. If you would invest 1,433 in Highland Capital Management on August 31, 2024 and sell it today you would earn a total of 29.00 from holding Highland Capital Management or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 13.45% |
| Values | Daily Returns |
Highland Capital Management vs. VanEck ETF Trust
Performance |
| Timeline |
| Highland Capital Man |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| VanEck ETF Trust |
Highland Capital and VanEck ETF Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Capital and VanEck ETF
The main advantage of trading using opposite Highland Capital and VanEck ETF positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Capital position performs unexpectedly, VanEck ETF 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 VanEck ETF will offset losses from the drop in VanEck ETF's long position.| Highland Capital vs. VanEck ETF Trust | Highland Capital vs. PGIM ETF Trust | Highland Capital vs. Janus Detroit Street | Highland Capital vs. Janus Detroit Street |
| VanEck ETF vs. Janus Detroit Street | VanEck ETF vs. Janus Detroit Street | VanEck ETF vs. BlackRock AAA CLO | VanEck ETF vs. VanEck Investment Grade |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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