Correlation Between Eagle Point and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both Eagle Point and Gladstone Investment 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 Eagle Point and Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eagle Point Credit and Gladstone Investment, you can compare the effects of market volatilities on Eagle Point and Gladstone Investment 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 Eagle Point with a short position of Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eagle Point and Gladstone Investment.
Diversification Opportunities for Eagle Point and Gladstone Investment
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Eagle and Gladstone is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Eagle Point Credit and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and Eagle Point 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 Eagle Point Credit are associated (or correlated) with Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of Eagle Point i.e., Eagle Point and Gladstone Investment go up and down completely randomly.
Pair Corralation between Eagle Point and Gladstone Investment
Given the investment horizon of 90 days Eagle Point Credit is expected to generate 1.02 times more return on investment than Gladstone Investment. However, Eagle Point is 1.02 times more volatile than Gladstone Investment. It trades about 0.07 of its potential returns per unit of risk. Gladstone Investment is currently generating about 0.07 per unit of risk. If you would invest 2,204 in Eagle Point Credit on November 9, 2024 and sell it today you would earn a total of 204.00 from holding Eagle Point Credit or generate 9.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Eagle Point Credit vs. Gladstone Investment
Performance |
| Timeline |
| Eagle Point Credit |
| Gladstone Investment |
Eagle Point and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eagle Point and Gladstone Investment
The main advantage of trading using opposite Eagle Point and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eagle Point position performs unexpectedly, Gladstone Investment 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 Gladstone Investment will offset losses from the drop in Gladstone Investment's long position.| Eagle Point vs. Oxford Lane Capital | Eagle Point vs. Eagle Point Credit | Eagle Point vs. Eagle Point Credit | Eagle Point vs. Eagle Point Credit |
| Gladstone Investment vs. Newtek Business Services | Gladstone Investment vs. Oxford Lane Capital | Gladstone Investment vs. Gladstone Investment | Gladstone Investment vs. Gladstone Commercial Corp |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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