Correlation Between Prospect Capital and Guggenheim Strategic
Can any of the company-specific risk be diversified away by investing in both Prospect Capital and Guggenheim Strategic 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 Guggenheim Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prospect Capital and Guggenheim Strategic Opportunities, you can compare the effects of market volatilities on Prospect Capital and Guggenheim Strategic 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 Guggenheim Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prospect Capital and Guggenheim Strategic.
Diversification Opportunities for Prospect Capital and Guggenheim Strategic
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Prospect and Guggenheim is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Prospect Capital and Guggenheim Strategic Opportuni in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guggenheim Strategic 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 Guggenheim Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guggenheim Strategic has no effect on the direction of Prospect Capital i.e., Prospect Capital and Guggenheim Strategic go up and down completely randomly.
Pair Corralation between Prospect Capital and Guggenheim Strategic
Given the investment horizon of 90 days Prospect Capital is expected to generate 1.18 times more return on investment than Guggenheim Strategic. However, Prospect Capital is 1.18 times more volatile than Guggenheim Strategic Opportunities. It trades about 0.03 of its potential returns per unit of risk. Guggenheim Strategic Opportunities is currently generating about 0.03 per unit of risk. If you would invest 430.00 in Prospect Capital on November 2, 2024 and sell it today you would earn a total of 2.00 from holding Prospect Capital or generate 0.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prospect Capital vs. Guggenheim Strategic Opportuni
Performance |
| Timeline |
| Prospect Capital |
| Guggenheim Strategic |
Prospect Capital and Guggenheim Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prospect Capital and Guggenheim Strategic
The main advantage of trading using opposite Prospect Capital and Guggenheim Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prospect Capital position performs unexpectedly, Guggenheim Strategic 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 Guggenheim Strategic will offset losses from the drop in Guggenheim Strategic's long position.| Prospect Capital vs. Gladstone Capital | Prospect Capital vs. Horizon Technology Finance | Prospect Capital vs. Gladstone Investment | Prospect Capital vs. Stellus Capital Investment |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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