Correlation Between Highland Global and Profile Systems

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

Diversification Opportunities for Highland Global and Profile Systems

0.35

Correlation Coefficient

Highland Global  Profile Systems

Weak diversification

The 3 months correlation between Highland and Profile is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Highland Global Allocation and Profile Systems Software in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Profile Systems Software 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 Profile Systems. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Profile Systems Software has no effect on the direction of Highland Global i.e., Highland Global and Profile Systems go up and down completely randomly.

Pair Corralation between Highland Global and Profile Systems

Given the investment horizon of 90 days Highland Global is expected to generate 7.08 times less return on investment than Profile Systems. But when comparing it to its historical volatility, Highland Global Allocation is 1.36 times less risky than Profile Systems. It trades about 0.07 of its potential returns per unit of risk. Profile Systems Software is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  559.00  in Profile Systems Software on May 2, 2025 and sell it today you would earn a total of  206.00  from holding Profile Systems Software or generate 36.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Highland Global Allocation  vs.  Profile Systems Software

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 5 (%) 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.

Profile Systems Software

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Profile Systems Software are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Profile Systems unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Highland Global and Profile Systems

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

The idea behind Highland Global Allocation and Profile Systems Software 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..