Correlation Between Horizon Technology and Carlyle Secured
Can any of the company-specific risk be diversified away by investing in both Horizon Technology and Carlyle Secured 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 Carlyle Secured 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 Carlyle Secured Lending, you can compare the effects of market volatilities on Horizon Technology and Carlyle Secured 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 Carlyle Secured. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Technology and Carlyle Secured.
Diversification Opportunities for Horizon Technology and Carlyle Secured
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Horizon and Carlyle is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Technology Finance and Carlyle Secured Lending in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlyle Secured Lending 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 Carlyle Secured. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlyle Secured Lending has no effect on the direction of Horizon Technology i.e., Horizon Technology and Carlyle Secured go up and down completely randomly.
Pair Corralation between Horizon Technology and Carlyle Secured
Given the investment horizon of 90 days Horizon Technology Finance is expected to under-perform the Carlyle Secured. But the stock apears to be less risky and, when comparing its historical volatility, Horizon Technology Finance is 1.05 times less risky than Carlyle Secured. The stock trades about -0.09 of its potential returns per unit of risk. The Carlyle Secured Lending is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,715 in Carlyle Secured Lending on August 31, 2024 and sell it today you would earn a total of 17.00 from holding Carlyle Secured Lending or generate 0.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Horizon Technology Finance vs. Carlyle Secured Lending
Performance |
| Timeline |
| Horizon Technology |
| Carlyle Secured Lending |
Horizon Technology and Carlyle Secured Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horizon Technology and Carlyle Secured
The main advantage of trading using opposite Horizon Technology and Carlyle Secured positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Technology position performs unexpectedly, Carlyle Secured 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 Carlyle Secured will offset losses from the drop in Carlyle Secured's long position.| Horizon Technology vs. Ares Capital | Horizon Technology vs. Hercules Capital | Horizon Technology vs. Main Street Capital |
| Carlyle Secured vs. Sixth Street Specialty | Carlyle Secured vs. Golub Capital BDC | Carlyle Secured vs. Fidus Investment Corp | Carlyle Secured vs. New Mountain Finance |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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