Correlation Between Prospect Capital and Ladenburg Thalmann
Can any of the company-specific risk be diversified away by investing in both Prospect Capital and Ladenburg Thalmann 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 Prospect Capital and Ladenburg Thalmann into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prospect Capital and Ladenburg Thalmann Financial, you can compare the effects of market volatilities on Prospect Capital and Ladenburg Thalmann 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 Prospect Capital with a short position of Ladenburg Thalmann. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prospect Capital and Ladenburg Thalmann.
Diversification Opportunities for Prospect Capital and Ladenburg Thalmann
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prospect and Ladenburg is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Prospect Capital and Ladenburg Thalmann Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ladenburg Thalmann and Prospect Capital 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 Prospect Capital are associated (or correlated) with Ladenburg Thalmann. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ladenburg Thalmann has no effect on the direction of Prospect Capital i.e., Prospect Capital and Ladenburg Thalmann go up and down completely randomly.
Pair Corralation between Prospect Capital and Ladenburg Thalmann
If you would invest 1,827 in Prospect Capital on September 13, 2024 and sell it today you would earn a total of 122.00 from holding Prospect Capital or generate 6.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Prospect Capital vs. Ladenburg Thalmann Financial
Performance |
| Timeline |
| Prospect Capital |
| Ladenburg Thalmann |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Prospect Capital and Ladenburg Thalmann Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prospect Capital and Ladenburg Thalmann
The main advantage of trading using opposite Prospect Capital and Ladenburg Thalmann positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prospect Capital position performs unexpectedly, Ladenburg Thalmann 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 Ladenburg Thalmann will offset losses from the drop in Ladenburg Thalmann's long position.| Prospect Capital vs. PennyMac Mortgage Investment | Prospect Capital vs. SiriusPoint | Prospect Capital vs. Telephone and Data | Prospect Capital vs. ARMOUR Residential REIT |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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