Correlation Between Highland Small-cap and Highland Small-cap

Can any of the company-specific risk be diversified away by investing in both Highland Small-cap and Highland Small-cap 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 Highland Small-cap 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 Highland Small Cap Equity, you can compare the effects of market volatilities on Highland Small-cap and Highland Small-cap 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 Highland Small-cap. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Small-cap and Highland Small-cap.

Diversification Opportunities for Highland Small-cap and Highland Small-cap

1.0

Correlation Coefficient

Highland Small-cap  Highland Small-cap

No risk reduction

The 3 months correlation between Highland and Highland is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Highland Small Cap Equity and Highland Small Cap Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Small Cap 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 Highland Small-cap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Small Cap has no effect on the direction of Highland Small-cap i.e., Highland Small-cap and Highland Small-cap go up and down completely randomly.

Pair Corralation between Highland Small-cap and Highland Small-cap

Assuming the 90 days horizon Highland Small Cap Equity is expected to generate 0.97 times more return on investment than Highland Small-cap. However, Highland Small Cap Equity is 1.03 times less risky than Highland Small-cap. It trades about 0.18 of its potential returns per unit of risk. Highland Small Cap Equity is currently generating about 0.17 per unit of risk. If you would invest  539.00  in Highland Small Cap Equity on September 5, 2024 and sell it today you would earn a total of  58.00  from holding Highland Small Cap Equity or generate 10.76% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Highland Small Cap Equity  vs.  Highland Small Cap Equity

Highland Small Cap

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Highland Small Cap Equity are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Highland Small-cap may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Highland Small Cap

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Highland Small Cap Equity are ranked lower than 13 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak fundamental indicators, Highland Small-cap may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Highland Small-cap and Highland Small-cap

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

The idea behind Highland Small Cap Equity and Highland Small Cap Equity 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 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.