Correlation Between Highland Capital and Virtus Newfleet

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

Diversification Opportunities for Highland Capital and Virtus Newfleet

0.1

Correlation Coefficient

Highland Capital  Virtus Newfleet

Average diversification

The 3 months correlation between Highland and Virtus is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Highland Capital Management and Virtus Newfleet Multi Sector in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Virtus Newfleet Multi 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 Virtus Newfleet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Virtus Newfleet Multi has no effect on the direction of Highland Capital i.e., Highland Capital and Virtus Newfleet go up and down completely randomly.

Pair Corralation between Highland Capital and Virtus Newfleet

If you would invest  2,181  in Virtus Newfleet Multi Sector on September 15, 2024 and sell it today you would earn a total of  94.00  from holding Virtus Newfleet Multi Sector or generate 4.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	0.79%
Values	Daily Returns

Highland Capital Management  vs.  Virtus Newfleet Multi Sector

Highland Capital Man

Risk-Adjusted Performance

0 of 100

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 newest stock price disarray, may contribute to short-term losses for the investors.

Virtus Newfleet Multi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Virtus Newfleet Multi Sector has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Virtus Newfleet is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Highland Capital and Virtus Newfleet

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

The idea behind Highland Capital Management and Virtus Newfleet Multi Sector 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.