Correlation Between NYSE Composite and Crescent Capital
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Crescent Capital 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 NYSE Composite and Crescent Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Crescent Capital BDC, you can compare the effects of market volatilities on NYSE Composite and Crescent Capital 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 NYSE Composite with a short position of Crescent Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Crescent Capital.
Diversification Opportunities for NYSE Composite and Crescent Capital
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Crescent is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Crescent Capital BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crescent Capital BDC and NYSE Composite 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 NYSE Composite are associated (or correlated) with Crescent Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crescent Capital BDC has no effect on the direction of NYSE Composite i.e., NYSE Composite and Crescent Capital go up and down completely randomly.
Pair Corralation between NYSE Composite and Crescent Capital
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.46 times less return on investment than Crescent Capital. But when comparing it to its historical volatility, NYSE Composite is 1.95 times less risky than Crescent Capital. It trades about 0.3 of its potential returns per unit of risk. Crescent Capital BDC is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,820 in Crescent Capital BDC on August 31, 2024 and sell it today you would earn a total of 116.00 from holding Crescent Capital BDC or generate 6.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Crescent Capital BDC
Performance |
| Timeline |
NYSE Composite and Crescent Capital Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Crescent Capital BDC
Pair trading matchups for Crescent Capital
Pair Trading with NYSE Composite and Crescent Capital
The main advantage of trading using opposite NYSE Composite and Crescent Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Crescent Capital 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 Crescent Capital will offset losses from the drop in Crescent Capital's long position.| NYSE Composite vs. Nextplat Corp | NYSE Composite vs. Qualys Inc | NYSE Composite vs. Cadence Design Systems | NYSE Composite vs. Asure Software |
| Crescent Capital vs. BlackRock TCP Capital | Crescent Capital vs. Triplepoint Venture Growth | Crescent Capital vs. Sixth Street Specialty | Crescent Capital vs. Golub Capital BDC |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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