Correlation Between NXG NextGen and Investcorp Credit
Can any of the company-specific risk be diversified away by investing in both NXG NextGen 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 NXG NextGen and Investcorp Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NXG NextGen Infrastructure and Investcorp Credit Management, you can compare the effects of market volatilities on NXG NextGen 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 NXG NextGen with a short position of Investcorp Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of NXG NextGen and Investcorp Credit.
Diversification Opportunities for NXG NextGen and Investcorp Credit
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NXG and Investcorp is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding NXG NextGen Infrastructure and Investcorp Credit Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investcorp Credit and NXG NextGen 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 NXG NextGen Infrastructure 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 NXG NextGen i.e., NXG NextGen and Investcorp Credit go up and down completely randomly.
Pair Corralation between NXG NextGen and Investcorp Credit
Considering the 90-day investment horizon NXG NextGen Infrastructure is expected to generate 1.04 times more return on investment than Investcorp Credit. However, NXG NextGen is 1.04 times more volatile than Investcorp Credit Management. It trades about 0.05 of its potential returns per unit of risk. Investcorp Credit Management is currently generating about 0.02 per unit of risk. If you would invest 3,192 in NXG NextGen Infrastructure on August 24, 2024 and sell it today you would earn a total of 1,591 from holding NXG NextGen Infrastructure or generate 49.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NXG NextGen Infrastructure vs. Investcorp Credit Management
Performance |
| Timeline |
| NXG NextGen Infrastr |
| Investcorp Credit |
NXG NextGen and Investcorp Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NXG NextGen and Investcorp Credit
The main advantage of trading using opposite NXG NextGen and Investcorp Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NXG NextGen 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.| NXG NextGen vs. MFS Investment Grade | NXG NextGen vs. Invesco High Income | NXG NextGen vs. Eaton Vance National | NXG NextGen vs. Nuveen California Select |
| Investcorp Credit vs. Presidio Property Trust | Investcorp Credit vs. Great Elm Capital | Investcorp Credit vs. Portman Ridge Finance | Investcorp Credit vs. OFS Capital Corp |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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