Correlation Between Highland Longshort and Amg Southernsun

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Highland Longshort and Amg Southernsun 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 Longshort and Amg Southernsun into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highland Longshort Healthcare and Amg Southernsun Equity, you can compare the effects of market volatilities on Highland Longshort and Amg Southernsun 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 Longshort with a short position of Amg Southernsun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Longshort and Amg Southernsun.

Diversification Opportunities for Highland Longshort and Amg Southernsun

HighlandAmgDiversified AwayHighlandAmgDiversified Away100%
0.46
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Highland and Amg is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and Amg Southernsun Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amg Southernsun Equity and Highland Longshort 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 Longshort Healthcare are associated (or correlated) with Amg Southernsun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amg Southernsun Equity has no effect on the direction of Highland Longshort i.e., Highland Longshort and Amg Southernsun go up and down completely randomly.

Pair Corralation between Highland Longshort and Amg Southernsun

Assuming the 90 days horizon Highland Longshort Healthcare is expected to generate 0.1 times more return on investment than Amg Southernsun. However, Highland Longshort Healthcare is 9.67 times less risky than Amg Southernsun. It trades about 0.01 of its potential returns per unit of risk. Amg Southernsun Equity is currently generating about -0.13 per unit of risk. If you would invest  1,637  in Highland Longshort Healthcare on September 29, 2024 and sell it today you would earn a total of  2.00  from holding Highland Longshort Healthcare or generate 0.12% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Highland Longshort Healthcare  vs.  Amg Southernsun Equity

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -15-10-505
JavaScript chart by amCharts 3.21.15HHCZX SSEIX
       Timeline  
Highland Longshort 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Highland Longshort Healthcare has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Highland Longshort is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecDec16.3516.416.4516.516.5516.616.6516.716.75
Amg Southernsun Equity 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Amg Southernsun Equity has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.
JavaScript chart by amCharts 3.21.15NovDecDec1313.51414.51515.516

Highland Longshort and Amg Southernsun Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-0.6-0.39-0.18-0.0654-0.0081720.04740.120.330.540.75 2468
JavaScript chart by amCharts 3.21.15HHCZX SSEIX
       Returns  

Pair Trading with Highland Longshort and Amg Southernsun

The main advantage of trading using opposite Highland Longshort and Amg Southernsun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Longshort position performs unexpectedly, Amg Southernsun 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 Amg Southernsun will offset losses from the drop in Amg Southernsun's long position.
The idea behind Highland Longshort Healthcare and Amg Southernsun 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.
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.

Other Complementary Tools

Portfolio Backtesting
Avoid under-diversification and over-optimization by backtesting your portfolios
Portfolio Dashboard
Portfolio dashboard that provides centralized access to all your investments
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Competition Analyzer
Analyze and compare many basic indicators for a group of related or unrelated entities
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm