Correlation Between Highland Global and Volati AB

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

Diversification Opportunities for Highland Global and Volati AB

0.24

Correlation Coefficient

Highland Global  Volati AB

Modest diversification

The 3 months correlation between Highland and Volati is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Highland Global Allocation and Volati AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volati AB 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 Volati AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volati AB has no effect on the direction of Highland Global i.e., Highland Global and Volati AB go up and down completely randomly.

Pair Corralation between Highland Global and Volati AB

Given the investment horizon of 90 days Highland Global is expected to generate 1.18 times less return on investment than Volati AB. In addition to that, Highland Global is 3.8 times more volatile than Volati AB. It trades about 0.03 of its total potential returns per unit of risk. Volati AB is currently generating about 0.12 per unit of volatility. If you would invest  63,800  in Volati AB on May 5, 2025 and sell it today you would earn a total of  1,400  from holding Volati AB or generate 2.19% return on investment over 90 days.

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

Highland Global Allocation  vs.  Volati AB

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.

Volati AB

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Volati AB are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Volati AB is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Highland Global and Volati AB

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

The idea behind Highland Global Allocation and Volati AB 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.