Correlation Between Gladstone Investment and Eagle Point
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and Eagle Point 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 Gladstone Investment and Eagle Point into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and Eagle Point Credit, you can compare the effects of market volatilities on Gladstone Investment and Eagle Point 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 Gladstone Investment with a short position of Eagle Point. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and Eagle Point.
Diversification Opportunities for Gladstone Investment and Eagle Point
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gladstone and Eagle is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Eagle Point Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eagle Point Credit and Gladstone Investment 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 Gladstone Investment are associated (or correlated) with Eagle Point. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eagle Point Credit has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Eagle Point go up and down completely randomly.
Pair Corralation between Gladstone Investment and Eagle Point
Assuming the 90 days horizon Gladstone Investment is expected to generate 0.62 times more return on investment than Eagle Point. However, Gladstone Investment is 1.61 times less risky than Eagle Point. It trades about 0.18 of its potential returns per unit of risk. Eagle Point Credit is currently generating about 0.02 per unit of risk. If you would invest 2,440 in Gladstone Investment on September 1, 2024 and sell it today you would earn a total of 26.00 from holding Gladstone Investment or generate 1.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. Eagle Point Credit
Performance |
| Timeline |
| Gladstone Investment |
| Eagle Point Credit |
Gladstone Investment and Eagle Point Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and Eagle Point
The main advantage of trading using opposite Gladstone Investment and Eagle Point positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, Eagle Point 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 Eagle Point will offset losses from the drop in Eagle Point's long position.| Gladstone Investment vs. Newtek Business Services | Gladstone Investment vs. Oxford Lane Capital | Gladstone Investment vs. Gladstone Investment | Gladstone Investment vs. Gladstone Commercial Corp |
| Eagle Point vs. Oxford Lane Capital | Eagle Point vs. Eagle Point Credit | Eagle Point vs. Eagle Point Credit | Eagle Point vs. Eagle Point Credit |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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