Correlation Between Horizon Technology and New Mountain
Can any of the company-specific risk be diversified away by investing in both Horizon Technology and New Mountain 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 New Mountain 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 New Mountain Finance, you can compare the effects of market volatilities on Horizon Technology and New Mountain 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 New Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Horizon Technology and New Mountain.
Diversification Opportunities for Horizon Technology and New Mountain
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Horizon and New is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Horizon Technology Finance and New Mountain Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Mountain Finance 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 New Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Mountain Finance has no effect on the direction of Horizon Technology i.e., Horizon Technology and New Mountain go up and down completely randomly.
Pair Corralation between Horizon Technology and New Mountain
Given the investment horizon of 90 days Horizon Technology Finance is expected to under-perform the New Mountain. In addition to that, Horizon Technology is 1.45 times more volatile than New Mountain Finance. It trades about -0.11 of its total potential returns per unit of risk. New Mountain Finance is currently generating about -0.04 per unit of volatility. If you would invest 1,197 in New Mountain Finance on August 24, 2024 and sell it today you would lose (44.00) from holding New Mountain Finance or give up 3.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Horizon Technology Finance vs. New Mountain Finance
Performance |
| Timeline |
| Horizon Technology |
| New Mountain Finance |
Horizon Technology and New Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Horizon Technology and New Mountain
The main advantage of trading using opposite Horizon Technology and New Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Horizon Technology position performs unexpectedly, New Mountain 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 New Mountain will offset losses from the drop in New Mountain's long position.| Horizon Technology vs. Gladstone Capital | Horizon Technology vs. Gladstone Investment | Horizon Technology vs. Prospect Capital | Horizon Technology vs. Stellus Capital Investment |
| New Mountain vs. BlackRock TCP Capital | New Mountain vs. Carlyle Secured Lending | New Mountain vs. Sixth Street Specialty | New Mountain vs. WhiteHorse 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets |