Correlation Between Highland Global and Kinetics Paradigm

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

Diversification Opportunities for Highland Global and Kinetics Paradigm

-0.57

Correlation Coefficient

Highland Global  Kinetics Paradigm

Excellent diversification

The 3 months correlation between Highland and Kinetics is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Highland Global Allocation and Kinetics Paradigm Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kinetics Paradigm 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 Kinetics Paradigm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kinetics Paradigm has no effect on the direction of Highland Global i.e., Highland Global and Kinetics Paradigm go up and down completely randomly.

Pair Corralation between Highland Global and Kinetics Paradigm

Given the investment horizon of 90 days Highland Global Allocation is expected to generate 0.72 times more return on investment than Kinetics Paradigm. However, Highland Global Allocation is 1.4 times less risky than Kinetics Paradigm. It trades about 0.03 of its potential returns per unit of risk. Kinetics Paradigm Fund is currently generating about -0.21 per unit of risk. If you would invest  803.00  in Highland Global Allocation on May 4, 2025 and sell it today you would earn a total of  12.00  from holding Highland Global Allocation or generate 1.49% return on investment over 90 days.

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

Highland Global Allocation  vs.  Kinetics Paradigm Fund

Highland Global Allo

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Highland Global Allocation are ranked lower than 2 (%) 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.

Kinetics Paradigm

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kinetics Paradigm Fund has generated negative risk-adjusted returns adding no value to fund investors. In spite of weak performance in the last few months, the Fund's fundamental indicators remain fairly strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the fund investors.

Pair Trading with Highland Global and Kinetics Paradigm

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

The idea behind Highland Global Allocation and Kinetics Paradigm Fund 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 Transaction History module to view history of all your transactions and understand their impact on performance.