Correlation Between Strategic Allocation and Highland Longshort
Can any of the company-specific risk be diversified away by investing in both Strategic Allocation and Highland Longshort 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 Strategic Allocation and Highland Longshort into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Strategic Allocation Moderate and Highland Longshort Healthcare, you can compare the effects of market volatilities on Strategic Allocation and Highland Longshort 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 Strategic Allocation with a short position of Highland Longshort. Check out your portfolio center. Please also check ongoing floating volatility patterns of Strategic Allocation and Highland Longshort.
Diversification Opportunities for Strategic Allocation and Highland Longshort
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Strategic and Highland is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Allocation Moderate and Highland Longshort Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Longshort and Strategic Allocation 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 Strategic Allocation Moderate are associated (or correlated) with Highland Longshort. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Longshort has no effect on the direction of Strategic Allocation i.e., Strategic Allocation and Highland Longshort go up and down completely randomly.
Pair Corralation between Strategic Allocation and Highland Longshort
Assuming the 90 days horizon Strategic Allocation Moderate is expected to generate 2.79 times more return on investment than Highland Longshort. However, Strategic Allocation is 2.79 times more volatile than Highland Longshort Healthcare. It trades about 0.08 of its potential returns per unit of risk. Highland Longshort Healthcare is currently generating about 0.12 per unit of risk. If you would invest 556.00 in Strategic Allocation Moderate on September 12, 2024 and sell it today you would earn a total of 133.00 from holding Strategic Allocation Moderate or generate 23.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Strategic Allocation Moderate vs. Highland Longshort Healthcare
Performance |
| Timeline |
| Strategic Allocation |
| Highland Longshort |
Strategic Allocation and Highland Longshort Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Strategic Allocation and Highland Longshort
The main advantage of trading using opposite Strategic Allocation and Highland Longshort positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Strategic Allocation position performs unexpectedly, Highland Longshort 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 Highland Longshort will offset losses from the drop in Highland Longshort's long position.The idea behind Strategic Allocation Moderate and Highland Longshort Healthcare 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.
| Highland Longshort vs. Saat Moderate Strategy | Highland Longshort vs. Strategic Allocation Moderate | Highland Longshort vs. Jpmorgan Smartretirement 2035 | Highland Longshort vs. Columbia Moderate Growth |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Transaction History View history of all your transactions and understand their impact on performance |