Correlation Between Highland Global and Simt Mid

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

Diversification Opportunities for Highland Global and Simt Mid

0.6

Correlation Coefficient

Highland Global  Simt Mid

Poor diversification

The 3 months correlation between Highland and Simt is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Highland Global Allocation and Simt Mid Cap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Simt Mid Cap 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 Simt Mid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Simt Mid Cap has no effect on the direction of Highland Global i.e., Highland Global and Simt Mid go up and down completely randomly.

Pair Corralation between Highland Global and Simt Mid

Given the investment horizon of 90 days Highland Global is expected to generate 1.66 times less return on investment than Simt Mid. In addition to that, Highland Global is 1.39 times more volatile than Simt Mid Cap. It trades about 0.09 of its total potential returns per unit of risk. Simt Mid Cap is currently generating about 0.2 per unit of volatility. If you would invest  2,849  in Simt Mid Cap on May 1, 2025 and sell it today you would earn a total of  292.00  from holding Simt Mid Cap or generate 10.25% 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.  Simt Mid Cap

Highland Global Allo

Risk-Adjusted Performance

OK

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.

Simt Mid Cap

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Simt Mid Cap are ranked lower than 15 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly weak forward indicators, Simt Mid may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Highland Global and Simt Mid

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

The idea behind Highland Global Allocation and Simt Mid Cap 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.