Correlation Between Highland Global and VictoryShares Small

Can any of the company-specific risk be diversified away by investing in both Highland Global and VictoryShares Small 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 VictoryShares Small 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 VictoryShares Small Cap, you can compare the effects of market volatilities on Highland Global and VictoryShares Small 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 VictoryShares Small. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Global and VictoryShares Small.

Diversification Opportunities for Highland Global and VictoryShares Small

0.72

Correlation Coefficient

Highland Global  VictoryShares Small

Poor diversification

The 3 months correlation between Highland and VictoryShares is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Highland Global Allocation and VictoryShares Small Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VictoryShares Small Cap 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 VictoryShares Small. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VictoryShares Small Cap has no effect on the direction of Highland Global i.e., Highland Global and VictoryShares Small go up and down completely randomly.

Pair Corralation between Highland Global and VictoryShares Small

Given the investment horizon of 90 days Highland Global is expected to generate 1.27 times less return on investment than VictoryShares Small. But when comparing it to its historical volatility, Highland Global Allocation is 1.43 times less risky than VictoryShares Small. It trades about 0.14 of its potential returns per unit of risk. VictoryShares Small Cap is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  5,491  in VictoryShares Small Cap on June 29, 2025 and sell it today you would earn a total of  458.00  from holding VictoryShares Small Cap or generate 8.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Highland Global Allocation  vs.  VictoryShares Small Cap

Highland Global Allo

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Highland Global Allocation are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unfluctuating essential indicators, Highland Global may actually be approaching a critical reversion point that can send shares even higher in October 2025.

VictoryShares Small Cap

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in VictoryShares Small Cap are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, VictoryShares Small may actually be approaching a critical reversion point that can send shares even higher in October 2025.

Pair Trading with Highland Global and VictoryShares Small

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

The idea behind Highland Global Allocation and VictoryShares Small Cap 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.