Correlation Between Discover Financial and SuRo Capital
Can any of the company-specific risk be diversified away by investing in both Discover Financial and SuRo 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 Discover Financial and SuRo Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Discover Financial Services and SuRo Capital Corp, you can compare the effects of market volatilities on Discover Financial and SuRo 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 Discover Financial with a short position of SuRo Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Discover Financial and SuRo Capital.
Diversification Opportunities for Discover Financial and SuRo Capital
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Discover and SuRo is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Discover Financial Services and SuRo Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SuRo Capital Corp and Discover Financial 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 Discover Financial Services are associated (or correlated) with SuRo Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SuRo Capital Corp has no effect on the direction of Discover Financial i.e., Discover Financial and SuRo Capital go up and down completely randomly.
Pair Corralation between Discover Financial and SuRo Capital
Considering the 90-day investment horizon Discover Financial is expected to generate 1.74 times less return on investment than SuRo Capital. But when comparing it to its historical volatility, Discover Financial Services is 1.34 times less risky than SuRo Capital. It trades about 0.15 of its potential returns per unit of risk. SuRo Capital Corp is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 392.00 in SuRo Capital Corp on September 15, 2024 and sell it today you would earn a total of 242.00 from holding SuRo Capital Corp or generate 61.73% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Discover Financial Services vs. SuRo Capital Corp
Performance |
Timeline |
Discover Financial |
SuRo Capital Corp |
Discover Financial and SuRo Capital Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Discover Financial and SuRo Capital
The main advantage of trading using opposite Discover Financial and SuRo Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Discover Financial position performs unexpectedly, SuRo 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 SuRo Capital will offset losses from the drop in SuRo Capital's long position.Discover Financial vs. Visa Class A | Discover Financial vs. PayPal Holdings | Discover Financial vs. Upstart Holdings | Discover Financial vs. Mastercard |
SuRo Capital vs. Brightsphere Investment Group | SuRo Capital vs. Blackrock Muniholdings Ca | SuRo Capital vs. Putnam Managed Municipal | SuRo Capital vs. Investcorp Credit Management |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Money Managers Screen money managers from public funds and ETFs managed around the world | |
USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |