Correlation Between Stellar and Bain Capital
Can any of the company-specific risk be diversified away by investing in both Stellar and Bain 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 Stellar and Bain Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellar and Bain Capital Specialty, you can compare the effects of market volatilities on Stellar and Bain 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 Stellar with a short position of Bain Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar and Bain Capital.
Diversification Opportunities for Stellar and Bain Capital
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stellar and Bain is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Bain Capital Specialty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bain Capital Specialty and Stellar 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 Stellar are associated (or correlated) with Bain Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bain Capital Specialty has no effect on the direction of Stellar i.e., Stellar and Bain Capital go up and down completely randomly.
Pair Corralation between Stellar and Bain Capital
Assuming the 90 days trading horizon Stellar is expected to generate 10.13 times more return on investment than Bain Capital. However, Stellar is 10.13 times more volatile than Bain Capital Specialty. It trades about 0.18 of its potential returns per unit of risk. Bain Capital Specialty is currently generating about 0.3 per unit of risk. If you would invest 38.00 in Stellar on October 20, 2024 and sell it today you would earn a total of 11.00 from holding Stellar or generate 28.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Stellar vs. Bain Capital Specialty
Performance |
| Timeline |
| Stellar |
| Bain Capital Specialty |
Stellar and Bain Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellar and Bain Capital
The main advantage of trading using opposite Stellar and Bain Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar position performs unexpectedly, Bain 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 Bain Capital will offset losses from the drop in Bain Capital's long position.The idea behind Stellar and Bain Capital Specialty pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Bain Capital vs. BlackRock TCP Capital | Bain Capital vs. Triplepoint Venture Growth | Bain Capital vs. Sixth Street Specialty | Bain Capital vs. Golub Capital BDC |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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