Correlation Between Highland Long/short and First Trust
Can any of the company-specific risk be diversified away by investing in both Highland Long/short and First Trust 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 Long/short and First Trust 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 First Trust Merger, you can compare the effects of market volatilities on Highland Long/short and First Trust 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 Long/short with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Long/short and First Trust.
Diversification Opportunities for Highland Long/short and First Trust
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Highland and First is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Highland Longshort Healthcare and First Trust Merger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Merger and Highland Long/short 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 First Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Trust Merger has no effect on the direction of Highland Long/short i.e., Highland Long/short and First Trust go up and down completely randomly.
Pair Corralation between Highland Long/short and First Trust
Assuming the 90 days horizon Highland Longshort Healthcare is expected to generate 3.36 times more return on investment than First Trust. However, Highland Long/short is 3.36 times more volatile than First Trust Merger. It trades about 0.21 of its potential returns per unit of risk. First Trust Merger is currently generating about 0.04 per unit of risk. If you would invest 1,663 in Highland Longshort Healthcare on June 3, 2025 and sell it today you would earn a total of 61.00 from holding Highland Longshort Healthcare or generate 3.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highland Longshort Healthcare vs. First Trust Merger
Performance |
| Timeline |
| Highland Long/short |
| First Trust Merger |
Highland Long/short and First Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highland Long/short and First Trust
The main advantage of trading using opposite Highland Long/short and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Long/short position performs unexpectedly, First Trust 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 First Trust will offset losses from the drop in First Trust's long position.| Highland Long/short vs. Forum Real Estate | Highland Long/short vs. Global Real Estate | Highland Long/short vs. Baron Real Estate | Highland Long/short vs. Commonwealth Real Estate |
| First Trust vs. First Trust Managed | First Trust vs. Franklin Templeton Multi Asset | First Trust vs. First Trust Multi Strategy | First Trust vs. First Trust Short |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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