Correlation Between Horizon Technology and Bridge Investment
Can any of the company-specific risk be diversified away by investing in both Horizon Technology and Bridge Investment 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 Horizon Technology and Bridge Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Horizon Technology Finance and Bridge Investment Group, you can compare the effects of market volatilities on Horizon Technology and Bridge Investment 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 Horizon Technology with a short position of Bridge Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Technology and Bridge Investment.
Diversification Opportunities for Horizon Technology and Bridge Investment
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Horizon and Bridge is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Technology Finance and Bridge Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridge Investment and Horizon Technology 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 Horizon Technology Finance are associated (or correlated) with Bridge Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridge Investment has no effect on the direction of Horizon Technology i.e., Horizon Technology and Bridge Investment go up and down completely randomly.
Pair Corralation between Horizon Technology and Bridge Investment
Given the investment horizon of 90 days Horizon Technology Finance is expected to under-perform the Bridge Investment. But the stock apears to be less risky and, when comparing its historical volatility, Horizon Technology Finance is 2.09 times less risky than Bridge Investment. The stock trades about -0.17 of its potential returns per unit of risk. The Bridge Investment Group is currently generating about -0.06 of returns per unit of risk over similar time horizon. If you would invest 1,029 in Bridge Investment Group on September 13, 2024 and sell it today you would lose (76.00) from holding Bridge Investment Group or give up 7.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Horizon Technology Finance vs. Bridge Investment Group
Performance |
| Timeline |
| Horizon Technology |
| Bridge Investment |
Horizon Technology and Bridge Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horizon Technology and Bridge Investment
The main advantage of trading using opposite Horizon Technology and Bridge Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Technology position performs unexpectedly, Bridge Investment 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 Bridge Investment will offset losses from the drop in Bridge Investment's long position.| Horizon Technology vs. Gladstone Capital | Horizon Technology vs. Gladstone Investment | Horizon Technology vs. Prospect Capital | Horizon Technology vs. Stellus Capital Investment |
| Bridge Investment vs. Federated Premier Municipal | Bridge Investment vs. Blackrock Muniyield | Bridge Investment vs. Diamond Hill Investment | Bridge Investment vs. NXG NextGen Infrastructure |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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