Correlation Between Stellus Capital and Triplepoint Venture

Can any of the company-specific risk be diversified away by investing in both Stellus Capital and Triplepoint Venture 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 Stellus Capital and Triplepoint Venture into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Stellus Capital Investment and Triplepoint Venture Growth, you can compare the effects of market volatilities on Stellus Capital and Triplepoint Venture 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 Stellus Capital with a short position of Triplepoint Venture. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellus Capital and Triplepoint Venture.

Diversification Opportunities for Stellus Capital and Triplepoint Venture

0.79

Correlation Coefficient

Stellus Capital  Triplepoint Venture

Poor diversification

The 3 months correlation between Stellus and Triplepoint is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Stellus Capital Investment and Triplepoint Venture Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triplepoint Venture and Stellus 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 Stellus Capital Investment are associated (or correlated) with Triplepoint Venture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triplepoint Venture has no effect on the direction of Stellus Capital i.e., Stellus Capital and Triplepoint Venture go up and down completely randomly.

Pair Corralation between Stellus Capital and Triplepoint Venture

Considering the 90-day investment horizon Stellus Capital Investment is expected to generate 0.93 times more return on investment than Triplepoint Venture. However, Stellus Capital Investment is 1.08 times less risky than Triplepoint Venture. It trades about 0.08 of its potential returns per unit of risk. Triplepoint Venture Growth is currently generating about 0.03 per unit of risk. If you would invest  1,339  in Stellus Capital Investment on December 30, 2024 and sell it today you would earn a total of  86.00  from holding Stellus Capital Investment or generate 6.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Stellus Capital Investment  vs.  Triplepoint Venture Growth

Stellus Capital Inve

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Stellus Capital Investment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, Stellus Capital may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Triplepoint Venture

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Triplepoint Venture Growth are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Triplepoint Venture is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Stellus Capital and Triplepoint Venture

The main advantage of trading using opposite Stellus Capital and Triplepoint Venture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellus Capital position performs unexpectedly, Triplepoint Venture 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 Triplepoint Venture will offset losses from the drop in Triplepoint Venture's long position.

The idea behind Stellus Capital Investment and Triplepoint Venture Growth 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.