Correlation Between XAI Octagon and Prospect Capital
Can any of the company-specific risk be diversified away by investing in both XAI Octagon and Prospect 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 XAI Octagon and Prospect Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XAI Octagon Floating and Prospect Capital, you can compare the effects of market volatilities on XAI Octagon and Prospect 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 XAI Octagon with a short position of Prospect Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of XAI Octagon and Prospect Capital.
Diversification Opportunities for XAI Octagon and Prospect Capital
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between XAI and Prospect is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding XAI Octagon Floating and Prospect Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prospect Capital and XAI Octagon 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 XAI Octagon Floating are associated (or correlated) with Prospect Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prospect Capital has no effect on the direction of XAI Octagon i.e., XAI Octagon and Prospect Capital go up and down completely randomly.
Pair Corralation between XAI Octagon and Prospect Capital
Given the investment horizon of 90 days XAI Octagon Floating is expected to generate 0.6 times more return on investment than Prospect Capital. However, XAI Octagon Floating is 1.68 times less risky than Prospect Capital. It trades about 0.08 of its potential returns per unit of risk. Prospect Capital is currently generating about -0.01 per unit of risk. If you would invest 488.00 in XAI Octagon Floating on August 28, 2024 and sell it today you would earn a total of 207.00 from holding XAI Octagon Floating or generate 42.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XAI Octagon Floating vs. Prospect Capital
Performance |
| Timeline |
| XAI Octagon Floating |
| Prospect Capital |
XAI Octagon and Prospect Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XAI Octagon and Prospect Capital
The main advantage of trading using opposite XAI Octagon and Prospect Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XAI Octagon position performs unexpectedly, Prospect 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 Prospect Capital will offset losses from the drop in Prospect Capital's long position.| XAI Octagon vs. Oxford Lane Capital | XAI Octagon vs. Capital Southwest | XAI Octagon vs. Cornerstone Strategic Return | XAI Octagon vs. Cornerstone Strategic Value |
| Prospect Capital vs. Gladstone Capital | Prospect Capital vs. Horizon Technology Finance | Prospect Capital vs. Gladstone Investment | Prospect Capital vs. Stellus Capital 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |