Correlation Between Highland Global and MicroAlgo

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

Diversification Opportunities for Highland Global and MicroAlgo

-0.84

Correlation Coefficient

Highland Global  MicroAlgo

Pay attention - limited upside

The 3 months correlation between Highland and MicroAlgo is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Highland Global Allocation and MicroAlgo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MicroAlgo 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 MicroAlgo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MicroAlgo has no effect on the direction of Highland Global i.e., Highland Global and MicroAlgo go up and down completely randomly.

Pair Corralation between Highland Global and MicroAlgo

Given the investment horizon of 90 days Highland Global Allocation is expected to generate 0.09 times more return on investment than MicroAlgo. However, Highland Global Allocation is 11.31 times less risky than MicroAlgo. It trades about 0.09 of its potential returns per unit of risk. MicroAlgo is currently generating about -0.29 per unit of risk. If you would invest  771.00  in Highland Global Allocation on April 28, 2025 and sell it today you would earn a total of  46.00  from holding Highland Global Allocation or generate 5.97% return on investment over 90 days.

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

Highland Global Allocation  vs.  MicroAlgo

Highland Global Allo

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Highland Global Allocation are ranked lower than 6 (%) 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.

MicroAlgo

Risk-Adjusted Performance

Very Weak

Over the last 90 days MicroAlgo has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain very healthy which may send shares a bit higher in August 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Highland Global and MicroAlgo

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

The idea behind Highland Global Allocation and MicroAlgo 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.