Correlation Between Main Street and Hamilton Lane
Can any of the company-specific risk be diversified away by investing in both Main Street and Hamilton Lane 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 Main Street and Hamilton Lane into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Main Street Capital and Hamilton Lane, you can compare the effects of market volatilities on Main Street and Hamilton Lane 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 Main Street with a short position of Hamilton Lane. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main Street and Hamilton Lane.
Diversification Opportunities for Main Street and Hamilton Lane
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Main and Hamilton is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Main Street Capital and Hamilton Lane in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hamilton Lane and Main Street 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 Main Street Capital are associated (or correlated) with Hamilton Lane. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hamilton Lane has no effect on the direction of Main Street i.e., Main Street and Hamilton Lane go up and down completely randomly.
Pair Corralation between Main Street and Hamilton Lane
Given the investment horizon of 90 days Main Street Capital is expected to generate 0.48 times more return on investment than Hamilton Lane. However, Main Street Capital is 2.1 times less risky than Hamilton Lane. It trades about 0.18 of its potential returns per unit of risk. Hamilton Lane is currently generating about 0.08 per unit of risk. If you would invest 4,125 in Main Street Capital on November 4, 2024 and sell it today you would earn a total of 2,020 from holding Main Street Capital or generate 48.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Main Street Capital vs. Hamilton Lane
Performance |
| Timeline |
| Main Street Capital |
| Hamilton Lane |
Main Street and Hamilton Lane Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Main Street and Hamilton Lane
The main advantage of trading using opposite Main Street and Hamilton Lane positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Main Street position performs unexpectedly, Hamilton Lane 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 Hamilton Lane will offset losses from the drop in Hamilton Lane's long position.| Main Street vs. Gladstone Capital | Main Street vs. PennantPark Floating Rate | Main Street vs. Horizon Technology Finance | Main Street vs. Prospect Capital |
| Hamilton Lane vs. Noah Holdings | Hamilton Lane vs. Alvarium Tiedemann Holdings | Hamilton Lane vs. Blackrock Muniyield | Hamilton Lane vs. Blackrock Muni Intermediate |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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