Correlation Between Associated Capital and Bain Capital
Can any of the company-specific risk be diversified away by investing in both Associated Capital and Bain Capital 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 Associated Capital and Bain Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Associated Capital Group and Bain Capital Specialty, you can compare the effects of market volatilities on Associated Capital and Bain Capital 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 Associated Capital with a short position of Bain Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Bain Capital.
Diversification Opportunities for Associated Capital and Bain Capital
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Associated and Bain is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Bain Capital Specialty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bain Capital Specialty and Associated Capital 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 Associated Capital Group are associated (or correlated) with Bain Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bain Capital Specialty has no effect on the direction of Associated Capital i.e., Associated Capital and Bain Capital go up and down completely randomly.
Pair Corralation between Associated Capital and Bain Capital
Allowing for the 90-day total investment horizon Associated Capital Group is expected to generate 1.06 times more return on investment than Bain Capital. However, Associated Capital is 1.06 times more volatile than Bain Capital Specialty. It trades about 0.15 of its potential returns per unit of risk. Bain Capital Specialty is currently generating about -0.03 per unit of risk. If you would invest 3,544 in Associated Capital Group on August 24, 2024 and sell it today you would earn a total of 119.00 from holding Associated Capital Group or generate 3.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. Bain Capital Specialty
Performance |
| Timeline |
| Associated Capital |
| Bain Capital Specialty |
Associated Capital and Bain Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and Bain Capital
The main advantage of trading using opposite Associated Capital and Bain Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, Bain Capital 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 Bain Capital will offset losses from the drop in Bain Capital's long position.| Associated Capital vs. Abrdn Emerging Markets | Associated Capital vs. DWS Municipal Income | Associated Capital vs. Blackrock Muni Intermediate | Associated Capital vs. Blackrock Muniyield |
| Bain Capital vs. Invesco Advantage MIT | Bain Capital vs. Invesco Municipal Trust | Bain Capital vs. Invesco California Value | Bain Capital vs. Victory Capital Holdings |
Check out your portfolio center.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 CEOs Directory module to screen CEOs from public companies around the world.
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