Correlation Between Highland Global and GDEV

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

Diversification Opportunities for Highland Global and GDEV

0.69

Correlation Coefficient

Highland Global  GDEV

Poor diversification

The 3 months correlation between Highland and GDEV is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Highland Global Allocation and GDEV Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GDEV Inc 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 GDEV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GDEV Inc has no effect on the direction of Highland Global i.e., Highland Global and GDEV go up and down completely randomly.

Pair Corralation between Highland Global and GDEV

Given the investment horizon of 90 days Highland Global is expected to generate 9.84 times less return on investment than GDEV. But when comparing it to its historical volatility, Highland Global Allocation is 6.52 times less risky than GDEV. It trades about 0.06 of its potential returns per unit of risk. GDEV Inc is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  1,191  in GDEV Inc on May 2, 2025 and sell it today you would earn a total of  332.00  from holding GDEV Inc or generate 27.88% 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.  GDEV Inc

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.

GDEV Inc

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in GDEV Inc are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, GDEV showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Highland Global and GDEV

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

The idea behind Highland Global Allocation and GDEV Inc 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.