Correlation Between Highland Global and ADF

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

Diversification Opportunities for Highland Global and ADF

-0.31

Correlation Coefficient

Highland Global  ADF

Very good diversification

The 3 months correlation between Highland and ADF is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Highland Global Allocation and ADF Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADF Group 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 ADF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADF Group has no effect on the direction of Highland Global i.e., Highland Global and ADF go up and down completely randomly.

Pair Corralation between Highland Global and ADF

Given the investment horizon of 90 days Highland Global Allocation is expected to generate 0.3 times more return on investment than ADF. However, Highland Global Allocation is 3.36 times less risky than ADF. It trades about 0.22 of its potential returns per unit of risk. ADF Group is currently generating about 0.02 per unit of risk. If you would invest  823.00  in Highland Global Allocation on July 9, 2025 and sell it today you would earn a total of  176.00  from holding Highland Global Allocation or generate 21.39% return on investment over 90 days.

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

Highland Global Allocation  vs.  ADF Group

Highland Global Allo

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Highland Global Allocation are ranked lower than 17 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unfluctuating essential indicators, Highland Global sustained solid returns over the last few months and may actually be approaching a breakup point.

ADF Group

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ADF Group are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, ADF is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Highland Global and ADF

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

The idea behind Highland Global Allocation and ADF Group 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.