Correlation Between SuRo Capital and Cardiff Lexington

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

By analyzing existing cross correlation between SuRo Capital Corp and Cardiff Lexington Corp, you can compare the effects of market volatilities on SuRo Capital and Cardiff Lexington 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 SuRo Capital with a short position of Cardiff Lexington. Check out your portfolio center. Please also check ongoing floating volatility patterns of SuRo Capital and Cardiff Lexington.

Diversification Opportunities for SuRo Capital and Cardiff Lexington

-0.73

Correlation Coefficient

SuRo Capital  Cardiff Lexington

Pay attention - limited upside

The 3 months correlation between SuRo and Cardiff is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding SuRo Capital Corp and Cardiff Lexington Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cardiff Lexington Corp and SuRo 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 SuRo Capital Corp are associated (or correlated) with Cardiff Lexington. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cardiff Lexington Corp has no effect on the direction of SuRo Capital i.e., SuRo Capital and Cardiff Lexington go up and down completely randomly.

Pair Corralation between SuRo Capital and Cardiff Lexington

Given the investment horizon of 90 days SuRo Capital is expected to generate 34.59 times less return on investment than Cardiff Lexington. But when comparing it to its historical volatility, SuRo Capital Corp is 23.46 times less risky than Cardiff Lexington. It trades about 0.07 of its potential returns per unit of risk. Cardiff Lexington Corp is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Cardiff Lexington Corp on September 12, 2024 and sell it today you would earn a total of  299.99  from holding Cardiff Lexington Corp or generate 2999900.0% return on investment over 90 days.

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

SuRo Capital Corp  vs.  Cardiff Lexington Corp

SuRo Capital Corp

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SuRo Capital Corp are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SuRo Capital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Cardiff Lexington Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cardiff Lexington Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward indicators, Cardiff Lexington is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with SuRo Capital and Cardiff Lexington

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

The idea behind SuRo Capital Corp and Cardiff Lexington Corp 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.