Correlation Between Prospect Capital and Perella Weinberg
Can any of the company-specific risk be diversified away by investing in both Prospect Capital and Perella Weinberg 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 Perella Weinberg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prospect Capital and Perella Weinberg Partners, you can compare the effects of market volatilities on Prospect Capital and Perella Weinberg 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 Perella Weinberg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prospect Capital and Perella Weinberg.
Diversification Opportunities for Prospect Capital and Perella Weinberg
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Prospect and Perella is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Prospect Capital and Perella Weinberg Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perella Weinberg Partners 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 Perella Weinberg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perella Weinberg Partners has no effect on the direction of Prospect Capital i.e., Prospect Capital and Perella Weinberg go up and down completely randomly.
Pair Corralation between Prospect Capital and Perella Weinberg
Given the investment horizon of 90 days Prospect Capital is expected to generate 1.53 times less return on investment than Perella Weinberg. But when comparing it to its historical volatility, Prospect Capital is 2.01 times less risky than Perella Weinberg. It trades about 0.23 of its potential returns per unit of risk. Perella Weinberg Partners is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 2,396 in Perella Weinberg Partners on October 24, 2024 and sell it today you would earn a total of 180.00 from holding Perella Weinberg Partners or generate 7.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prospect Capital vs. Perella Weinberg Partners
Performance |
| Timeline |
| Prospect Capital |
| Perella Weinberg Partners |
Prospect Capital and Perella Weinberg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prospect Capital and Perella Weinberg
The main advantage of trading using opposite Prospect Capital and Perella Weinberg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prospect Capital position performs unexpectedly, Perella Weinberg 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 Perella Weinberg will offset losses from the drop in Perella Weinberg'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 |
| Perella Weinberg vs. Evercore Partners | Perella Weinberg vs. Lazard | Perella Weinberg vs. Piper Sandler Companies | Perella Weinberg vs. Moelis Co |
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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