Correlation Between Equus Total and Great Elm
Can any of the company-specific risk be diversified away by investing in both Equus Total and Great Elm 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 Equus Total and Great Elm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equus Total Return and Great Elm Capital, you can compare the effects of market volatilities on Equus Total and Great Elm 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 Equus Total with a short position of Great Elm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equus Total and Great Elm.
Diversification Opportunities for Equus Total and Great Elm
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Equus and Great is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Equus Total Return and Great Elm Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Elm Capital and Equus Total 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 Equus Total Return are associated (or correlated) with Great Elm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Elm Capital has no effect on the direction of Equus Total i.e., Equus Total and Great Elm go up and down completely randomly.
Pair Corralation between Equus Total and Great Elm
Considering the 90-day investment horizon Equus Total Return is expected to under-perform the Great Elm. In addition to that, Equus Total is 7.27 times more volatile than Great Elm Capital. It trades about -0.03 of its total potential returns per unit of risk. Great Elm Capital is currently generating about 0.07 per unit of volatility. If you would invest 2,396 in Great Elm Capital on August 30, 2024 and sell it today you would earn a total of 85.00 from holding Great Elm Capital or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Equus Total Return vs. Great Elm Capital
Performance |
| Timeline |
| Equus Total Return |
| Great Elm Capital |
Equus Total and Great Elm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equus Total and Great Elm
The main advantage of trading using opposite Equus Total and Great Elm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equus Total position performs unexpectedly, Great Elm 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 Great Elm will offset losses from the drop in Great Elm's long position.| Equus Total vs. Rand Capital Corp | Equus Total vs. Gabelli Convertible And | Equus Total vs. Mfs Intermediate High | Equus Total vs. RENN Fund |
| Great Elm vs. Gladstone Investment | Great Elm vs. HUMANA INC | Great Elm vs. Aquagold International | Great Elm vs. Barloworld Ltd ADR |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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