Correlation Between Highland Small and Hsbc Government

Can any of the company-specific risk be diversified away by investing in both Highland Small and Hsbc Government 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 and Hsbc Government 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 Hsbc Government Money, you can compare the effects of market volatilities on Highland Small and Hsbc Government 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 with a short position of Hsbc Government. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Small and Hsbc Government.

Diversification Opportunities for Highland Small and Hsbc Government

0.0

Correlation Coefficient

Highland Small  Hsbc Government

Pay attention - limited upside

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

Pair Corralation between Highland Small and Hsbc Government

If you would invest  629.00  in Highland Small Cap Equity on September 13, 2024 and sell it today you would earn a total of  53.00  from holding Highland Small Cap Equity or generate 8.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Highland Small Cap Equity  vs.  Hsbc Government Money

Highland Small Cap

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Highland Small Cap Equity are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak basic indicators, Highland Small may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Hsbc Government Money

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hsbc Government Money has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Hsbc Government is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Highland Small and Hsbc Government

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

The idea behind Highland Small Cap Equity and Hsbc Government Money 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.