Correlation Between Prospect Capital and Azimut Holding
Can any of the company-specific risk be diversified away by investing in both Prospect Capital and Azimut Holding 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 Prospect Capital and Azimut Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prospect Capital and Azimut Holding SpA, you can compare the effects of market volatilities on Prospect Capital and Azimut Holding 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 Prospect Capital with a short position of Azimut Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prospect Capital and Azimut Holding.
Diversification Opportunities for Prospect Capital and Azimut Holding
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Prospect and Azimut is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Prospect Capital and Azimut Holding SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Azimut Holding SpA and Prospect Capital 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 Prospect Capital are associated (or correlated) with Azimut Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Azimut Holding SpA has no effect on the direction of Prospect Capital i.e., Prospect Capital and Azimut Holding go up and down completely randomly.
Pair Corralation between Prospect Capital and Azimut Holding
Given the investment horizon of 90 days Prospect Capital is expected to generate 0.35 times more return on investment than Azimut Holding. However, Prospect Capital is 2.85 times less risky than Azimut Holding. It trades about 0.05 of its potential returns per unit of risk. Azimut Holding SpA is currently generating about -0.17 per unit of risk. If you would invest 546.00 in Prospect Capital on January 26, 2024 and sell it today you would earn a total of 4.00 from holding Prospect Capital or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prospect Capital vs. Azimut Holding SpA
Performance |
| Timeline |
| Prospect Capital |
| Azimut Holding SpA |
Prospect Capital and Azimut Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prospect Capital and Azimut Holding
The main advantage of trading using opposite Prospect Capital and Azimut Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prospect Capital position performs unexpectedly, Azimut Holding 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 Azimut Holding will offset losses from the drop in Azimut Holding's long position.| Prospect Capital vs. Gladstone Capital | Prospect Capital vs. Horizon Technology Finance | Prospect Capital vs. Gladstone Investment | Prospect Capital vs. Stellus Capital Investment |
| Azimut Holding vs. Starfleet Innotech | Azimut Holding vs. Flow Capital Corp | Azimut Holding vs. Blackhawk Growth Corp | Azimut Holding vs. AGF Management Limited |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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