Correlation Between Portman Ridge and Acadian Asset

Can any of the company-specific risk be diversified away by investing in both Portman Ridge and Acadian Asset 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 Portman Ridge and Acadian Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Portman Ridge Finance and Acadian Asset Management, you can compare the effects of market volatilities on Portman Ridge and Acadian Asset 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 Portman Ridge with a short position of Acadian Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Portman Ridge and Acadian Asset.

Diversification Opportunities for Portman Ridge and Acadian Asset

0.76

Correlation Coefficient

Portman Ridge  Acadian Asset

Poor diversification

The 3 months correlation between Portman and Acadian is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Portman Ridge Finance and Acadian Asset Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadian Asset Management and Portman Ridge 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 Portman Ridge Finance are associated (or correlated) with Acadian Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadian Asset Management has no effect on the direction of Portman Ridge i.e., Portman Ridge and Acadian Asset go up and down completely randomly.

Pair Corralation between Portman Ridge and Acadian Asset

Given the investment horizon of 90 days Portman Ridge is expected to generate 7.4 times less return on investment than Acadian Asset. But when comparing it to its historical volatility, Portman Ridge Finance is 1.19 times less risky than Acadian Asset. It trades about 0.06 of its potential returns per unit of risk. Acadian Asset Management is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  2,886  in Acadian Asset Management on May 7, 2025 and sell it today you would earn a total of  1,176  from holding Acadian Asset Management or generate 40.75% return on investment over 90 days.

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

Portman Ridge Finance  vs.  Acadian Asset Management

Portman Ridge Finance

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Portman Ridge Finance are ranked lower than 4 (%) 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 current stock price disarray, may contribute to short-term losses for the investors.

Acadian Asset Management

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Acadian Asset Management are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent primary indicators, Acadian Asset demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Portman Ridge and Acadian Asset

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

The idea behind Portman Ridge Finance and Acadian Asset Management 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.