Correlation Between Nasdaq and Highland Capital

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

By analyzing existing cross correlation between Nasdaq Inc and Highland Capital Management, you can compare the effects of market volatilities on Nasdaq and Highland Capital 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 Nasdaq with a short position of Highland Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nasdaq and Highland Capital.

Diversification Opportunities for Nasdaq and Highland Capital

0.0

Correlation Coefficient

Nasdaq  Highland Capital

Pay attention - limited upside

The 3 months correlation between Nasdaq and Highland is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nasdaq Inc and Highland Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highland Capital Man and Nasdaq 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 Nasdaq Inc are associated (or correlated) with Highland Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highland Capital Man has no effect on the direction of Nasdaq i.e., Nasdaq and Highland Capital go up and down completely randomly.

Pair Corralation between Nasdaq and Highland Capital

If you would invest (100.00) in Highland Capital Management on December 26, 2024 and sell it today you would earn a total of  100.00  from holding Highland Capital Management or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Nasdaq Inc  vs.  Highland Capital Management

Nasdaq Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Nasdaq Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Nasdaq is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Highland Capital Man

Risk-Adjusted Performance

Very Weak

Over the last 90 days Highland Capital Management has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, Highland Capital is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Nasdaq and Highland Capital

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

The idea behind Nasdaq Inc and Highland Capital Management 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.