Correlation Between Carlyle Secured and Hercules Capital
Can any of the company-specific risk be diversified away by investing in both Carlyle Secured and Hercules 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 Carlyle Secured and Hercules Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carlyle Secured Lending and Hercules Capital, you can compare the effects of market volatilities on Carlyle Secured and Hercules 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 Carlyle Secured with a short position of Hercules Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle Secured and Hercules Capital.
Diversification Opportunities for Carlyle Secured and Hercules Capital
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Carlyle and Hercules is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Secured Lending and Hercules Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hercules Capital and Carlyle Secured 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 Carlyle Secured Lending are associated (or correlated) with Hercules Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hercules Capital has no effect on the direction of Carlyle Secured i.e., Carlyle Secured and Hercules Capital go up and down completely randomly.
Pair Corralation between Carlyle Secured and Hercules Capital
Given the investment horizon of 90 days Carlyle Secured is expected to generate 1.47 times less return on investment than Hercules Capital. But when comparing it to its historical volatility, Carlyle Secured Lending is 1.26 times less risky than Hercules Capital. It trades about 0.11 of its potential returns per unit of risk. Hercules Capital is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 967.00 in Hercules Capital on November 1, 2024 and sell it today you would earn a total of 1,139 from holding Hercules Capital or generate 117.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carlyle Secured Lending vs. Hercules Capital
Performance |
| Timeline |
| Carlyle Secured Lending |
| Hercules Capital |
Carlyle Secured and Hercules Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carlyle Secured and Hercules Capital
The main advantage of trading using opposite Carlyle Secured and Hercules Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle Secured position performs unexpectedly, Hercules 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 Hercules Capital will offset losses from the drop in Hercules Capital's long position.| Carlyle Secured vs. Sixth Street Specialty | Carlyle Secured vs. Golub Capital BDC | Carlyle Secured vs. Fidus Investment Corp | Carlyle Secured vs. New Mountain Finance |
| Hercules Capital vs. Main Street Capital | Hercules Capital vs. PennantPark Floating Rate | Hercules Capital vs. FS KKR Capital | Hercules Capital vs. Prospect Capital |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |