Correlation Between Associated Capital and Portman Ridge
Can any of the company-specific risk be diversified away by investing in both Associated Capital and Portman Ridge 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 Portman Ridge 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 Portman Ridge Finance, you can compare the effects of market volatilities on Associated Capital and Portman Ridge 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 Portman Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Associated Capital and Portman Ridge.
Diversification Opportunities for Associated Capital and Portman Ridge
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Associated and Portman is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Associated Capital Group and Portman Ridge Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Portman Ridge Finance 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 Portman Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Portman Ridge Finance has no effect on the direction of Associated Capital i.e., Associated Capital and Portman Ridge go up and down completely randomly.
Pair Corralation between Associated Capital and Portman Ridge
Allowing for the 90-day total investment horizon Associated Capital Group is expected to generate 0.8 times more return on investment than Portman Ridge. However, Associated Capital Group is 1.25 times less risky than Portman Ridge. It trades about 0.03 of its potential returns per unit of risk. Portman Ridge Finance is currently generating about -0.19 per unit of risk. If you would invest 3,609 in Associated Capital Group on August 27, 2024 and sell it today you would earn a total of 16.00 from holding Associated Capital Group or generate 0.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Associated Capital Group vs. Portman Ridge Finance
Performance |
| Timeline |
| Associated Capital |
| Portman Ridge Finance |
Associated Capital and Portman Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Associated Capital and Portman Ridge
The main advantage of trading using opposite Associated Capital and Portman Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Associated Capital position performs unexpectedly, Portman Ridge 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 Portman Ridge will offset losses from the drop in Portman Ridge's long position.| Associated Capital vs. PowerUp Acquisition Corp | Associated Capital vs. Aurora Innovation | Associated Capital vs. HUMANA INC | Associated Capital vs. Aquagold International |
| Portman Ridge vs. Logan Ridge Finance | Portman Ridge vs. MFS Investment Grade | Portman Ridge vs. Eaton Vance National | Portman Ridge vs. WhiteHorse Finance |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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