Correlation Between Highland Global and Clearpool

Can any of the company-specific risk be diversified away by investing in both Highland Global and Clearpool 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 Global and Clearpool into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Highland Global Allocation and Clearpool, you can compare the effects of market volatilities on Highland Global and Clearpool 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 Global with a short position of Clearpool. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Global and Clearpool.

Diversification Opportunities for Highland Global and Clearpool

-0.64

Correlation Coefficient

Highland Global  Clearpool

Excellent diversification

The 3 months correlation between Highland and Clearpool is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Highland Global Allocation and Clearpool in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearpool and Highland Global 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 Global Allocation are associated (or correlated) with Clearpool. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearpool has no effect on the direction of Highland Global i.e., Highland Global and Clearpool go up and down completely randomly.

Pair Corralation between Highland Global and Clearpool

Given the investment horizon of 90 days Highland Global is expected to generate 2.54 times less return on investment than Clearpool. But when comparing it to its historical volatility, Highland Global Allocation is 6.85 times less risky than Clearpool. It trades about 0.06 of its potential returns per unit of risk. Clearpool is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  14.00  in Clearpool on May 2, 2025 and sell it today you would lose (1.00) from holding Clearpool or give up 7.14% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.38%
Values	Daily Returns

Highland Global Allocation  vs.  Clearpool

Highland Global Allo

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Highland Global Allocation are ranked lower than 4 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat strong essential indicators, Highland Global is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Clearpool

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Clearpool are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Clearpool may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Highland Global and Clearpool

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

The idea behind Highland Global Allocation and Clearpool 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.