Correlation Between Main Street and Stellus Capital
Can any of the company-specific risk be diversified away by investing in both Main Street and Stellus 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 Main Street and Stellus Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Main Street Capital and Stellus Capital Investment, you can compare the effects of market volatilities on Main Street and Stellus 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 Main Street with a short position of Stellus Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Main Street and Stellus Capital.
Diversification Opportunities for Main Street and Stellus Capital
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Main and Stellus is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Main Street Capital and Stellus Capital Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stellus Capital Inve and Main Street 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 Main Street Capital are associated (or correlated) with Stellus Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stellus Capital Inve has no effect on the direction of Main Street i.e., Main Street and Stellus Capital go up and down completely randomly.
Pair Corralation between Main Street and Stellus Capital
Given the investment horizon of 90 days Main Street Capital is expected to generate 1.1 times more return on investment than Stellus Capital. However, Main Street is 1.1 times more volatile than Stellus Capital Investment. It trades about 0.25 of its potential returns per unit of risk. Stellus Capital Investment is currently generating about 0.21 per unit of risk. If you would invest 5,753 in Main Street Capital on June 7, 2025 and sell it today you would earn a total of 906.00 from holding Main Street Capital or generate 15.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Main Street Capital vs. Stellus Capital Investment
Performance |
| Timeline |
| Main Street Capital |
| Stellus Capital Inve |
Main Street and Stellus Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Main Street and Stellus Capital
The main advantage of trading using opposite Main Street and Stellus Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Main Street position performs unexpectedly, Stellus 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 Stellus Capital will offset losses from the drop in Stellus Capital's long position.| Main Street vs. Gladstone Capital | Main Street vs. PennantPark Floating Rate | Main Street vs. Horizon Technology Finance | Main Street vs. Prospect Capital |
| Stellus Capital vs. PennantPark Floating Rate | Stellus Capital vs. Gladstone Capital | Stellus Capital vs. Gladstone Investment | Stellus Capital vs. Prospect Capital |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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