Correlation Between FirstCash and Crescent Capital
Can any of the company-specific risk be diversified away by investing in both FirstCash and Crescent 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 FirstCash and Crescent Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FirstCash and Crescent Capital BDC, you can compare the effects of market volatilities on FirstCash and Crescent 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 FirstCash with a short position of Crescent Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of FirstCash and Crescent Capital.
Diversification Opportunities for FirstCash and Crescent Capital
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FirstCash and Crescent is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding FirstCash and Crescent Capital BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescent Capital BDC and FirstCash 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 FirstCash are associated (or correlated) with Crescent Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescent Capital BDC has no effect on the direction of FirstCash i.e., FirstCash and Crescent Capital go up and down completely randomly.
Pair Corralation between FirstCash and Crescent Capital
Given the investment horizon of 90 days FirstCash is expected to generate 6.3 times less return on investment than Crescent Capital. In addition to that, FirstCash is 1.86 times more volatile than Crescent Capital BDC. It trades about 0.01 of its total potential returns per unit of risk. Crescent Capital BDC is currently generating about 0.12 per unit of volatility. If you would invest 1,532 in Crescent Capital BDC on September 12, 2024 and sell it today you would earn a total of 440.00 from holding Crescent Capital BDC or generate 28.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FirstCash vs. Crescent Capital BDC
Performance |
| Timeline |
| FirstCash |
| Crescent Capital BDC |
FirstCash and Crescent Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FirstCash and Crescent Capital
The main advantage of trading using opposite FirstCash and Crescent Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstCash position performs unexpectedly, Crescent 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 Crescent Capital will offset losses from the drop in Crescent Capital's long position.| FirstCash vs. World Acceptance | FirstCash vs. Enova International | FirstCash vs. Green Dot | FirstCash vs. Medallion Financial Corp |
| Crescent Capital vs. BlackRock TCP Capital | Crescent Capital vs. Triplepoint Venture Growth | Crescent Capital vs. Sixth Street Specialty | Crescent Capital vs. Golub Capital BDC |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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