Correlation Between Highest Performances and Equus Total

Can any of the company-specific risk be diversified away by investing in both Highest Performances and Equus Total 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 Highest Performances and Equus Total into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Highest Performances Holdings and Equus Total Return, you can compare the effects of market volatilities on Highest Performances and Equus Total 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 Highest Performances with a short position of Equus Total. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highest Performances and Equus Total.

Diversification Opportunities for Highest Performances and Equus Total

-0.1

Correlation Coefficient

Highest Performances  Equus Total

Good diversification

The 3 months correlation between Highest and Equus is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Highest Performances Holdings and Equus Total Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equus Total Return and Highest Performances 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 Highest Performances Holdings are associated (or correlated) with Equus Total. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equus Total Return has no effect on the direction of Highest Performances i.e., Highest Performances and Equus Total go up and down completely randomly.

Pair Corralation between Highest Performances and Equus Total

Considering the 90-day investment horizon Highest Performances Holdings is expected to under-perform the Equus Total. In addition to that, Highest Performances is 2.07 times more volatile than Equus Total Return. It trades about -0.1 of its total potential returns per unit of risk. Equus Total Return is currently generating about 0.02 per unit of volatility. If you would invest  108.00  in Equus Total Return on December 28, 2024 and sell it today you would earn a total of  1.00  from holding Equus Total Return or generate 0.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Highest Performances Holdings  vs.  Equus Total Return

Highest Performances

Risk-Adjusted Performance

Very Weak

Over the last 90 days Highest Performances Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Equus Total Return

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Equus Total Return are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Equus Total may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Highest Performances and Equus Total

The main advantage of trading using opposite Highest Performances and Equus Total positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highest Performances position performs unexpectedly, Equus Total 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 Equus Total will offset losses from the drop in Equus Total's long position.

The idea behind Highest Performances Holdings and Equus Total Return 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.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.