Correlation Between Portman Ridge and WhiteHorse Finance
Can any of the company-specific risk be diversified away by investing in both Portman Ridge and WhiteHorse Finance 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 Portman Ridge and WhiteHorse Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Portman Ridge Finance and WhiteHorse Finance, you can compare the effects of market volatilities on Portman Ridge and WhiteHorse Finance 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 Portman Ridge with a short position of WhiteHorse Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Portman Ridge and WhiteHorse Finance.
Diversification Opportunities for Portman Ridge and WhiteHorse Finance
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Portman and WhiteHorse is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Portman Ridge Finance and WhiteHorse Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WhiteHorse Finance and Portman Ridge 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 Portman Ridge Finance are associated (or correlated) with WhiteHorse Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WhiteHorse Finance has no effect on the direction of Portman Ridge i.e., Portman Ridge and WhiteHorse Finance go up and down completely randomly.
Pair Corralation between Portman Ridge and WhiteHorse Finance
Given the investment horizon of 90 days Portman Ridge Finance is expected to under-perform the WhiteHorse Finance. But the stock apears to be less risky and, when comparing its historical volatility, Portman Ridge Finance is 1.75 times less risky than WhiteHorse Finance. The stock trades about -0.1 of its potential returns per unit of risk. The WhiteHorse Finance is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 1,015 in WhiteHorse Finance on October 23, 2024 and sell it today you would lose (16.00) from holding WhiteHorse Finance or give up 1.58% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Portman Ridge Finance vs. WhiteHorse Finance
Performance |
| Timeline |
| Portman Ridge Finance |
| WhiteHorse Finance |
Portman Ridge and WhiteHorse Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Portman Ridge and WhiteHorse Finance
The main advantage of trading using opposite Portman Ridge and WhiteHorse Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Portman Ridge position performs unexpectedly, WhiteHorse Finance 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 WhiteHorse Finance will offset losses from the drop in WhiteHorse Finance's long position.| Portman Ridge vs. Logan Ridge Finance | Portman Ridge vs. MFS Investment Grade | Portman Ridge vs. Eaton Vance National | Portman Ridge vs. WhiteHorse Finance |
| WhiteHorse Finance vs. Monroe Capital Corp | WhiteHorse Finance vs. Portman Ridge Finance | WhiteHorse Finance vs. Fidus Investment Corp | WhiteHorse Finance vs. Diamond Hill 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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