Correlation Between P10 and Portman Ridge

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Can any of the company-specific risk be diversified away by investing in both P10 and Portman Ridge 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 P10 and Portman Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between P10 Inc and Portman Ridge Finance, you can compare the effects of market volatilities on P10 and Portman Ridge 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 P10 with a short position of Portman Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of P10 and Portman Ridge.

Diversification Opportunities for P10 and Portman Ridge

P10PortmanDiversified AwayP10PortmanDiversified Away100%
-0.1
  Correlation Coefficient

Good diversification

The 3 months correlation between P10 and Portman is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding P10 Inc and Portman Ridge Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Portman Ridge Finance and P10 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 P10 Inc are associated (or correlated) with Portman Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Portman Ridge Finance has no effect on the direction of P10 i.e., P10 and Portman Ridge go up and down completely randomly.

Pair Corralation between P10 and Portman Ridge

Allowing for the 90-day total investment horizon P10 Inc is expected to under-perform the Portman Ridge. In addition to that, P10 is 1.93 times more volatile than Portman Ridge Finance. It trades about -0.09 of its total potential returns per unit of risk. Portman Ridge Finance is currently generating about 0.19 per unit of volatility. If you would invest  1,660  in Portman Ridge Finance on November 20, 2024 and sell it today you would earn a total of  67.00  from holding Portman Ridge Finance or generate 4.04% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

P10 Inc  vs.  Portman Ridge Finance

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -505101520
JavaScript chart by amCharts 3.21.15PX PTMN
       Timeline  
P10 Inc 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days P10 Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, P10 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1212.51313.514
Portman Ridge Finance 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Portman Ridge Finance are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy primary indicators, Portman Ridge is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb1616.216.416.616.81717.217.4

P10 and Portman Ridge Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.51-4.88-3.24-1.610.01.633.335.026.718.4 0.10.20.30.40.5
JavaScript chart by amCharts 3.21.15PX PTMN
       Returns  

Pair Trading with P10 and Portman Ridge

The main advantage of trading using opposite P10 and Portman Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if P10 position performs unexpectedly, Portman Ridge 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 Portman Ridge will offset losses from the drop in Portman Ridge's long position.
The idea behind P10 Inc and Portman Ridge Finance 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.
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.

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