Correlation Between WhiteHorse Finance and Main Street
Can any of the company-specific risk be diversified away by investing in both WhiteHorse Finance and Main Street 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 Main Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WhiteHorse Finance and Main Street Capital, you can compare the effects of market volatilities on WhiteHorse Finance and Main Street 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 Main Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of WhiteHorse Finance and Main Street.
Diversification Opportunities for WhiteHorse Finance and Main Street
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between WhiteHorse and Main is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding WhiteHorse Finance and Main Street Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Main Street 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 Main Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Main Street Capital has no effect on the direction of WhiteHorse Finance i.e., WhiteHorse Finance and Main Street go up and down completely randomly.
Pair Corralation between WhiteHorse Finance and Main Street
Considering the 90-day investment horizon WhiteHorse Finance is expected to under-perform the Main Street. In addition to that, WhiteHorse Finance is 1.22 times more volatile than Main Street Capital. It trades about -0.07 of its total potential returns per unit of risk. Main Street Capital is currently generating about 0.13 per unit of volatility. If you would invest 4,700 in Main Street Capital on August 29, 2024 and sell it today you would earn a total of 800.00 from holding Main Street Capital or generate 17.02% 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. Main Street Capital
Performance |
| Timeline |
| WhiteHorse Finance |
| Main Street Capital |
WhiteHorse Finance and Main Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WhiteHorse Finance and Main Street
The main advantage of trading using opposite WhiteHorse Finance and Main Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WhiteHorse Finance position performs unexpectedly, Main Street 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 Main Street will offset losses from the drop in Main Street'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 |
| Main Street vs. Gladstone Capital | Main Street vs. PennantPark Floating Rate | Main Street vs. Horizon Technology Finance | Main Street vs. Prospect Capital |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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