Correlation Between Highland Longshort and Templeton Constrained
Can any of the company-specific risk be diversified away by investing in both Highland Longshort and Templeton Constrained 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 Templeton Constrained 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 Templeton Strained Bond, you can compare the effects of market volatilities on Highland Longshort and Templeton Constrained 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 Templeton Constrained. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Longshort and Templeton Constrained.
Diversification Opportunities for Highland Longshort and Templeton Constrained
0.91 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Highland and Templeton is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and Templeton Strained Bond in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Templeton Strained Bond 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 Templeton Constrained. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Templeton Strained Bond has no effect on the direction of Highland Longshort i.e., Highland Longshort and Templeton Constrained go up and down completely randomly.
Pair Corralation between Highland Longshort and Templeton Constrained
Assuming the 90 days horizon Highland Longshort Healthcare is expected to generate 4.22 times more return on investment than Templeton Constrained. However, Highland Longshort is 4.22 times more volatile than Templeton Strained Bond. It trades about 0.19 of its potential returns per unit of risk. Templeton Strained Bond is currently generating about 0.75 per unit of risk. If you would invest 1,425 in Highland Longshort Healthcare on June 1, 2025 and sell it today you would earn a total of 49.00 from holding Highland Longshort Healthcare or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Longshort Healthcare vs. Templeton Strained Bond
Performance |
| Timeline |
| Highland Longshort |
| Templeton Strained Bond |
Highland Longshort and Templeton Constrained Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Longshort and Templeton Constrained
The main advantage of trading using opposite Highland Longshort and Templeton Constrained positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Longshort position performs unexpectedly, Templeton Constrained 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 Templeton Constrained will offset losses from the drop in Templeton Constrained's long position.| Highland Longshort vs. Highland Merger Arbitrage | Highland Longshort vs. Highland Merger Arbitrage | Highland Longshort vs. Highland Merger Arbitrage | Highland Longshort vs. Highland Small Cap Equity |
| Templeton Constrained vs. Vanguard Total Stock | Templeton Constrained vs. Vanguard 500 Index | Templeton Constrained vs. Vanguard Total Stock | Templeton Constrained vs. Vanguard Total Stock |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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