Correlation Between Beneficient Warrant and Prospect Capital
Can any of the company-specific risk be diversified away by investing in both Beneficient Warrant and Prospect 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 Beneficient Warrant and Prospect Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beneficient Warrant and Prospect Capital, you can compare the effects of market volatilities on Beneficient Warrant and Prospect 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 Beneficient Warrant with a short position of Prospect Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beneficient Warrant and Prospect Capital.
Diversification Opportunities for Beneficient Warrant and Prospect Capital
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Beneficient and Prospect is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Beneficient Warrant and Prospect Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prospect Capital and Beneficient Warrant 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 Beneficient Warrant are associated (or correlated) with Prospect Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prospect Capital has no effect on the direction of Beneficient Warrant i.e., Beneficient Warrant and Prospect Capital go up and down completely randomly.
Pair Corralation between Beneficient Warrant and Prospect Capital
Assuming the 90 days horizon Beneficient Warrant is expected to generate 4.07 times more return on investment than Prospect Capital. However, Beneficient Warrant is 4.07 times more volatile than Prospect Capital. It trades about 0.01 of its potential returns per unit of risk. Prospect Capital is currently generating about -0.17 per unit of risk. If you would invest 0.93 in Beneficient Warrant on October 24, 2024 and sell it today you would lose (0.03) from holding Beneficient Warrant or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beneficient Warrant vs. Prospect Capital
Performance |
| Timeline |
| Beneficient Warrant |
| Prospect Capital |
Beneficient Warrant and Prospect Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beneficient Warrant and Prospect Capital
The main advantage of trading using opposite Beneficient Warrant and Prospect Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beneficient Warrant position performs unexpectedly, Prospect 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 Prospect Capital will offset losses from the drop in Prospect Capital's long position.| Beneficient Warrant vs. Dennys Corp | Beneficient Warrant vs. The Cheesecake Factory | Beneficient Warrant vs. Thai Beverage PCL | Beneficient Warrant vs. Shake Shack |
| Prospect Capital vs. PennyMac Mortgage Investment | Prospect Capital vs. SiriusPoint | Prospect Capital vs. Telephone and Data | Prospect Capital vs. ARMOUR Residential REIT |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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