Correlation Between Highland Global and First Trust

Can any of the company-specific risk be diversified away by investing in both Highland Global 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 Global 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 Global Allocation and First Trust Nasdaq, you can compare the effects of market volatilities on Highland Global 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 Global with a short position of First Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highland Global and First Trust.

Diversification Opportunities for Highland Global and First Trust

-0.75

Correlation Coefficient

Highland Global  First Trust

Pay attention - limited upside

The 3 months correlation between Highland and First is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Highland Global Allocation and First Trust Nasdaq in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Trust Nasdaq 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 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 Nasdaq has no effect on the direction of Highland Global i.e., Highland Global and First Trust go up and down completely randomly.

Pair Corralation between Highland Global and First Trust

Given the investment horizon of 90 days Highland Global Allocation is expected to generate 1.91 times more return on investment than First Trust. However, Highland Global is 1.91 times more volatile than First Trust Nasdaq. It trades about 0.24 of its potential returns per unit of risk. First Trust Nasdaq is currently generating about -0.09 per unit of risk. If you would invest  801.00  in Highland Global Allocation on July 29, 2025 and sell it today you would earn a total of  194.00  from holding Highland Global Allocation or generate 24.22% return on investment over 90 days.

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

Highland Global Allocation  vs.  First Trust Nasdaq

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 18 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat unsteady essential indicators, Highland Global sustained solid returns over the last few months and may actually be approaching a breakup point.

First Trust Nasdaq

Risk-Adjusted Performance

Weakest

Over the last 90 days First Trust Nasdaq has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, First Trust is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Highland Global and First Trust

The main advantage of trading using opposite Highland Global and First Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highland Global 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.

The idea behind Highland Global Allocation and First Trust Nasdaq 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.