Correlation Between Broad Capital and Saratoga Investment
Can any of the company-specific risk be diversified away by investing in both Broad Capital and Saratoga Investment 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 Broad Capital and Saratoga Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Broad Capital Acquisition and Saratoga Investment Corp, you can compare the effects of market volatilities on Broad Capital and Saratoga Investment 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 Broad Capital with a short position of Saratoga Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Broad Capital and Saratoga Investment.
Diversification Opportunities for Broad Capital and Saratoga Investment
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Broad and Saratoga is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Broad Capital Acquisition and Saratoga Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saratoga Investment Corp and Broad 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 Broad Capital Acquisition are associated (or correlated) with Saratoga Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saratoga Investment Corp has no effect on the direction of Broad Capital i.e., Broad Capital and Saratoga Investment go up and down completely randomly.
Pair Corralation between Broad Capital and Saratoga Investment
Assuming the 90 days horizon Broad Capital is expected to generate 3.32 times less return on investment than Saratoga Investment. But when comparing it to its historical volatility, Broad Capital Acquisition is 1.45 times less risky than Saratoga Investment. It trades about 0.01 of its potential returns per unit of risk. Saratoga Investment Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 2,370 in Saratoga Investment Corp on September 2, 2024 and sell it today you would earn a total of 199.00 from holding Saratoga Investment Corp or generate 8.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Broad Capital Acquisition vs. Saratoga Investment Corp
Performance |
| Timeline |
| Broad Capital Acquisition |
| Saratoga Investment Corp |
Broad Capital and Saratoga Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Broad Capital and Saratoga Investment
The main advantage of trading using opposite Broad Capital and Saratoga Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Broad Capital position performs unexpectedly, Saratoga Investment 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 Saratoga Investment will offset losses from the drop in Saratoga Investment's long position.| Broad Capital vs. Visa Class A | Broad Capital vs. Diamond Hill Investment | Broad Capital vs. Distoken Acquisition | Broad Capital vs. Associated Capital Group |
| Saratoga Investment vs. New Mountain Finance | Saratoga Investment vs. BlackRock TCP Capital | Saratoga Investment vs. Carlyle Secured Lending | Saratoga Investment vs. Sixth Street Specialty |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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