Correlation Between Great Elm and Crescent Capital
Can any of the company-specific risk be diversified away by investing in both Great Elm 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 Great Elm and Crescent Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Elm Capital and Crescent Capital BDC, you can compare the effects of market volatilities on Great Elm 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 Great Elm with a short position of Crescent Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Elm and Crescent Capital.
Diversification Opportunities for Great Elm and Crescent Capital
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Great and Crescent is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Great Elm Capital 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 Great Elm 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 Great Elm Capital 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 Great Elm i.e., Great Elm and Crescent Capital go up and down completely randomly.
Pair Corralation between Great Elm and Crescent Capital
Given the investment horizon of 90 days Great Elm is expected to generate 84.9 times less return on investment than Crescent Capital. In addition to that, Great Elm is 1.43 times more volatile than Crescent Capital BDC. It trades about 0.0 of its total potential returns per unit of risk. Crescent Capital BDC is currently generating about 0.08 per unit of volatility. If you would invest 1,929 in Crescent Capital BDC on November 4, 2024 and sell it today you would earn a total of 31.00 from holding Crescent Capital BDC or generate 1.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Great Elm Capital vs. Crescent Capital BDC
Performance |
| Timeline |
| Great Elm Capital |
| Crescent Capital BDC |
Great Elm and Crescent Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Great Elm and Crescent Capital
The main advantage of trading using opposite Great Elm and Crescent Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Elm 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.| Great Elm vs. John Hancock Investors | Great Elm vs. MFS Charter Income | Great Elm vs. GCM Grosvenor | Great Elm vs. BlackRock ESG Capital |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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