Correlation Between WhiteHorse Finance and Ares Capital
Can any of the company-specific risk be diversified away by investing in both WhiteHorse Finance and Ares Capital 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 WhiteHorse Finance and Ares Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WhiteHorse Finance and Ares Capital, you can compare the effects of market volatilities on WhiteHorse Finance and Ares Capital 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 WhiteHorse Finance with a short position of Ares Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of WhiteHorse Finance and Ares Capital.
Diversification Opportunities for WhiteHorse Finance and Ares Capital
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WhiteHorse and Ares is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding WhiteHorse Finance and Ares Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Capital and WhiteHorse Finance 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 WhiteHorse Finance are associated (or correlated) with Ares Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Capital has no effect on the direction of WhiteHorse Finance i.e., WhiteHorse Finance and Ares Capital go up and down completely randomly.
Pair Corralation between WhiteHorse Finance and Ares Capital
Considering the 90-day investment horizon WhiteHorse Finance is expected to generate 4.49 times less return on investment than Ares Capital. In addition to that, WhiteHorse Finance is 1.37 times more volatile than Ares Capital. It trades about 0.01 of its total potential returns per unit of risk. Ares Capital is currently generating about 0.08 per unit of volatility. If you would invest 1,576 in Ares Capital on September 2, 2024 and sell it today you would earn a total of 639.00 from holding Ares Capital or generate 40.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WhiteHorse Finance vs. Ares Capital
Performance |
| Timeline |
| WhiteHorse Finance |
| Ares Capital |
WhiteHorse Finance and Ares Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WhiteHorse Finance and Ares Capital
The main advantage of trading using opposite WhiteHorse Finance and Ares Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WhiteHorse Finance position performs unexpectedly, Ares Capital 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 Ares Capital will offset losses from the drop in Ares Capital's long position.| WhiteHorse Finance vs. Monroe Capital Corp | WhiteHorse Finance vs. Portman Ridge Finance | WhiteHorse Finance vs. Fidus Investment Corp | WhiteHorse Finance vs. Diamond Hill Investment |
| Ares Capital vs. Triplepoint Venture Growth | Ares Capital vs. Sixth Street Specialty | Ares Capital vs. Main Street Capital | Ares Capital vs. Capital Southwest |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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