Correlation Between Great Elm and Investcorp Credit
Can any of the company-specific risk be diversified away by investing in both Great Elm and Investcorp Credit 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 Investcorp Credit 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 Investcorp Credit Management, you can compare the effects of market volatilities on Great Elm and Investcorp Credit 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 Investcorp Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Elm and Investcorp Credit.
Diversification Opportunities for Great Elm and Investcorp Credit
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Great and Investcorp is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Great Elm Capital and Investcorp Credit Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investcorp Credit 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 Investcorp Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investcorp Credit has no effect on the direction of Great Elm i.e., Great Elm and Investcorp Credit go up and down completely randomly.
Pair Corralation between Great Elm and Investcorp Credit
Given the investment horizon of 90 days Great Elm Capital is expected to generate 0.89 times more return on investment than Investcorp Credit. However, Great Elm Capital is 1.12 times less risky than Investcorp Credit. It trades about 0.09 of its potential returns per unit of risk. Investcorp Credit Management is currently generating about 0.02 per unit of risk. If you would invest 621.00 in Great Elm Capital on October 24, 2024 and sell it today you would earn a total of 454.00 from holding Great Elm Capital or generate 73.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Great Elm Capital vs. Investcorp Credit Management
Performance |
Timeline |
Great Elm Capital |
Investcorp Credit |
Great Elm and Investcorp Credit Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Great Elm and Investcorp Credit
The main advantage of trading using opposite Great Elm and Investcorp Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Elm position performs unexpectedly, Investcorp Credit 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 Investcorp Credit will offset losses from the drop in Investcorp Credit'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 |
Investcorp Credit vs. Presidio Property Trust | Investcorp Credit vs. Great Elm Capital | Investcorp Credit vs. Portman Ridge Finance | Investcorp Credit vs. OFS Capital Corp |
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 CEOs Directory module to screen CEOs from public companies around the world.
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