Correlation Between Gladstone Investment and Royalty Management
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and Royalty Management 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 Royalty Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and Royalty Management Holding, you can compare the effects of market volatilities on Gladstone Investment and Royalty Management 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 Royalty Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and Royalty Management.
Diversification Opportunities for Gladstone Investment and Royalty Management
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gladstone and Royalty is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Royalty Management Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royalty Management 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 Royalty Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royalty Management has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Royalty Management go up and down completely randomly.
Pair Corralation between Gladstone Investment and Royalty Management
Assuming the 90 days horizon Gladstone Investment is expected to generate 8.23 times less return on investment than Royalty Management. But when comparing it to its historical volatility, Gladstone Investment is 13.88 times less risky than Royalty Management. It trades about 0.08 of its potential returns per unit of risk. Royalty Management Holding is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 92.00 in Royalty Management Holding on November 3, 2024 and sell it today you would earn a total of 25.00 from holding Royalty Management Holding or generate 27.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. Royalty Management Holding
Performance |
| Timeline |
| Gladstone Investment |
| Royalty Management |
Gladstone Investment and Royalty Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and Royalty Management
The main advantage of trading using opposite Gladstone Investment and Royalty Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, Royalty Management 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 Royalty Management will offset losses from the drop in Royalty Management'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 |
| Royalty Management vs. PennantPark Floating Rate | Royalty Management vs. Gfl Environmental Holdings | Royalty Management vs. Stepstone Group | Royalty Management vs. US Global Investors |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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