Correlation Between Tradeweb Markets and New Mountain
Can any of the company-specific risk be diversified away by investing in both Tradeweb Markets and New Mountain 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 Tradeweb Markets and New Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradeweb Markets and New Mountain Finance, you can compare the effects of market volatilities on Tradeweb Markets and New Mountain 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 Tradeweb Markets with a short position of New Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradeweb Markets and New Mountain.
Diversification Opportunities for Tradeweb Markets and New Mountain
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Tradeweb and New is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Tradeweb Markets and New Mountain Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Mountain Finance and Tradeweb Markets 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 Tradeweb Markets are associated (or correlated) with New Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Mountain Finance has no effect on the direction of Tradeweb Markets i.e., Tradeweb Markets and New Mountain go up and down completely randomly.
Pair Corralation between Tradeweb Markets and New Mountain
Allowing for the 90-day total investment horizon Tradeweb Markets is expected to under-perform the New Mountain. In addition to that, Tradeweb Markets is 2.04 times more volatile than New Mountain Finance. It trades about -0.06 of its total potential returns per unit of risk. New Mountain Finance is currently generating about 0.52 per unit of volatility. If you would invest 1,127 in New Mountain Finance on November 18, 2024 and sell it today you would earn a total of 66.00 from holding New Mountain Finance or generate 5.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tradeweb Markets vs. New Mountain Finance
Performance |
| Timeline |
| Tradeweb Markets |
| New Mountain Finance |
Tradeweb Markets and New Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradeweb Markets and New Mountain
The main advantage of trading using opposite Tradeweb Markets and New Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradeweb Markets position performs unexpectedly, New Mountain 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 New Mountain will offset losses from the drop in New Mountain's long position.| Tradeweb Markets vs. Raymond James Financial | Tradeweb Markets vs. PJT Partners | Tradeweb Markets vs. Moelis Co | Tradeweb Markets vs. LPL Financial Holdings |
| New Mountain vs. BlackRock TCP Capital | New Mountain vs. Carlyle Secured Lending | New Mountain vs. Sixth Street Specialty | New Mountain vs. WhiteHorse Finance |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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