Correlation Between New Mountain and Investcorp Credit
Can any of the company-specific risk be diversified away by investing in both New Mountain 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 New Mountain and Investcorp Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Mountain Finance and Investcorp Credit Management, you can compare the effects of market volatilities on New Mountain 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 New Mountain with a short position of Investcorp Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Mountain and Investcorp Credit.
Diversification Opportunities for New Mountain and Investcorp Credit
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between New and Investcorp is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding New Mountain Finance and Investcorp Credit Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investcorp Credit and New Mountain 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 New Mountain Finance 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 New Mountain i.e., New Mountain and Investcorp Credit go up and down completely randomly.
Pair Corralation between New Mountain and Investcorp Credit
Given the investment horizon of 90 days New Mountain Finance is expected to generate 0.7 times more return on investment than Investcorp Credit. However, New Mountain Finance is 1.42 times less risky than Investcorp Credit. It trades about 0.11 of its potential returns per unit of risk. Investcorp Credit Management is currently generating about 0.07 per unit of risk. If you would invest 1,144 in New Mountain Finance on August 29, 2024 and sell it today you would earn a total of 38.00 from holding New Mountain Finance or generate 3.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Mountain Finance vs. Investcorp Credit Management
Performance |
| Timeline |
| New Mountain Finance |
| Investcorp Credit |
New Mountain and Investcorp Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Mountain and Investcorp Credit
The main advantage of trading using opposite New Mountain and Investcorp Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Mountain 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.| New Mountain vs. BlackRock TCP Capital | New Mountain vs. Carlyle Secured Lending | New Mountain vs. Sixth Street Specialty | New Mountain vs. WhiteHorse Finance |
| Investcorp Credit vs. Aurora Innovation | Investcorp Credit vs. HUMANA INC | Investcorp Credit vs. Aquagold International | Investcorp Credit vs. Barloworld Ltd ADR |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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