Correlation Between RMR and Investcorp Credit
Can any of the company-specific risk be diversified away by investing in both RMR and Investcorp Credit 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 RMR and Investcorp Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between RMR Group and Investcorp Credit Management, you can compare the effects of market volatilities on RMR and Investcorp Credit 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 RMR with a short position of Investcorp Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of RMR and Investcorp Credit.
Diversification Opportunities for RMR and Investcorp Credit
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between RMR and Investcorp is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding RMR Group and Investcorp Credit Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investcorp Credit and RMR 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 RMR Group are associated (or correlated) with Investcorp Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investcorp Credit has no effect on the direction of RMR i.e., RMR and Investcorp Credit go up and down completely randomly.
Pair Corralation between RMR and Investcorp Credit
Considering the 90-day investment horizon RMR Group is expected to under-perform the Investcorp Credit. But the stock apears to be less risky and, when comparing its historical volatility, RMR Group is 1.13 times less risky than Investcorp Credit. The stock trades about -0.01 of its potential returns per unit of risk. The Investcorp Credit Management is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 316.00 in Investcorp Credit Management on August 27, 2024 and sell it today you would earn a total of 2.00 from holding Investcorp Credit Management or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RMR Group vs. Investcorp Credit Management
Performance |
| Timeline |
| RMR Group |
| Investcorp Credit |
RMR and Investcorp Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RMR and Investcorp Credit
The main advantage of trading using opposite RMR and Investcorp Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RMR position performs unexpectedly, Investcorp Credit 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 Investcorp Credit will offset losses from the drop in Investcorp Credit's long position.| RMR vs. Investcorp Credit Management | RMR vs. Medalist Diversified Reit | RMR vs. Aquagold International | RMR vs. Morningstar Unconstrained Allocation |
| Investcorp Credit vs. Presidio Property Trust | Investcorp Credit vs. Great Elm Capital | Investcorp Credit vs. Portman Ridge Finance | Investcorp Credit vs. OFS Capital Corp |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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