Correlation Between BlackRock Capital and New Mountain
Can any of the company-specific risk be diversified away by investing in both BlackRock Capital and New Mountain 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 BlackRock Capital and New Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock Capital Allocation and New Mountain Finance, you can compare the effects of market volatilities on BlackRock Capital and New Mountain 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 BlackRock Capital with a short position of New Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock Capital and New Mountain.
Diversification Opportunities for BlackRock Capital and New Mountain
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between BlackRock and New is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock Capital Allocation and New Mountain Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Mountain Finance and BlackRock 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 BlackRock Capital Allocation are associated (or correlated) with New Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Mountain Finance has no effect on the direction of BlackRock Capital i.e., BlackRock Capital and New Mountain go up and down completely randomly.
Pair Corralation between BlackRock Capital and New Mountain
Given the investment horizon of 90 days BlackRock Capital is expected to generate 1.89 times less return on investment than New Mountain. But when comparing it to its historical volatility, BlackRock Capital Allocation is 1.8 times less risky than New Mountain. It trades about 0.2 of its potential returns per unit of risk. New Mountain Finance is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 1,137 in New Mountain Finance on September 12, 2024 and sell it today you would earn a total of 43.00 from holding New Mountain Finance or generate 3.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock Capital Allocation vs. New Mountain Finance
Performance |
| Timeline |
| BlackRock Capital |
| New Mountain Finance |
BlackRock Capital and New Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock Capital and New Mountain
The main advantage of trading using opposite BlackRock Capital and New Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock Capital position performs unexpectedly, New Mountain 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 New Mountain will offset losses from the drop in New Mountain's long position.| BlackRock Capital vs. BlackRock Health Sciences | BlackRock Capital vs. BlackRock Science and | BlackRock Capital vs. Neuberger Berman Next | BlackRock Capital vs. Virtus Allianzgi Artificial |
| New Mountain vs. BlackRock TCP Capital | New Mountain vs. Carlyle Secured Lending | New Mountain vs. Sixth Street Specialty | New Mountain 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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