Correlation Between Binah Capital and Chicago Atlantic

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Can any of the company-specific risk be diversified away by investing in both Binah Capital and Chicago Atlantic 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 Binah Capital and Chicago Atlantic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binah Capital Group, and Chicago Atlantic BDC,, you can compare the effects of market volatilities on Binah Capital and Chicago Atlantic 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 Binah Capital with a short position of Chicago Atlantic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binah Capital and Chicago Atlantic.

Diversification Opportunities for Binah Capital and Chicago Atlantic

-0.39
  Correlation Coefficient

Very good diversification

The 3 months correlation between Binah and Chicago is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Binah Capital Group, and Chicago Atlantic BDC, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chicago Atlantic BDC, and Binah 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 Binah Capital Group, are associated (or correlated) with Chicago Atlantic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chicago Atlantic BDC, has no effect on the direction of Binah Capital i.e., Binah Capital and Chicago Atlantic go up and down completely randomly.

Pair Corralation between Binah Capital and Chicago Atlantic

Assuming the 90 days horizon Binah Capital Group, is expected to under-perform the Chicago Atlantic. In addition to that, Binah Capital is 10.68 times more volatile than Chicago Atlantic BDC,. It trades about -0.17 of its total potential returns per unit of risk. Chicago Atlantic BDC, is currently generating about -0.12 per unit of volatility. If you would invest  1,257  in Chicago Atlantic BDC, on September 22, 2024 and sell it today you would lose (34.00) from holding Chicago Atlantic BDC, or give up 2.7% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy47.62%
ValuesDaily Returns

Binah Capital Group,  vs.  Chicago Atlantic BDC,

 Performance 
       Timeline  
Binah Capital Group, 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Binah Capital Group, are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Binah Capital showed solid returns over the last few months and may actually be approaching a breakup point.
Chicago Atlantic BDC, 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Chicago Atlantic BDC, are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Chicago Atlantic may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Binah Capital and Chicago Atlantic Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Binah Capital and Chicago Atlantic

The main advantage of trading using opposite Binah Capital and Chicago Atlantic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binah Capital position performs unexpectedly, Chicago Atlantic 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 Chicago Atlantic will offset losses from the drop in Chicago Atlantic's long position.
The idea behind Binah Capital Group, and Chicago Atlantic BDC, 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.
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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