Correlation Between Golub Capital and Ares Capital
Can any of the company-specific risk be diversified away by investing in both Golub Capital and Ares 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 Golub Capital and Ares Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Golub Capital BDC and Ares Capital, you can compare the effects of market volatilities on Golub Capital and Ares 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 Golub Capital with a short position of Ares Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golub Capital and Ares Capital.
Diversification Opportunities for Golub Capital and Ares Capital
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Golub and Ares is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Golub Capital BDC and Ares Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ares Capital and Golub Capital 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 Golub Capital BDC are associated (or correlated) with Ares Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ares Capital has no effect on the direction of Golub Capital i.e., Golub Capital and Ares Capital go up and down completely randomly.
Pair Corralation between Golub Capital and Ares Capital
Given the investment horizon of 90 days Golub Capital is expected to generate 1.04 times less return on investment than Ares Capital. In addition to that, Golub Capital is 1.01 times more volatile than Ares Capital. It trades about 0.07 of its total potential returns per unit of risk. Ares Capital is currently generating about 0.07 per unit of volatility. If you would invest 1,574 in Ares Capital on August 24, 2024 and sell it today you would earn a total of 604.00 from holding Ares Capital or generate 38.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golub Capital BDC vs. Ares Capital
Performance |
| Timeline |
| Golub Capital BDC |
| Ares Capital |
Golub Capital and Ares Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golub Capital and Ares Capital
The main advantage of trading using opposite Golub Capital and Ares Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golub Capital position performs unexpectedly, Ares 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 Ares Capital will offset losses from the drop in Ares Capital's long position.| Golub Capital vs. BlackRock TCP Capital | Golub Capital vs. Carlyle Secured Lending | Golub Capital vs. Triplepoint Venture Growth | Golub Capital vs. New Mountain Finance |
| Ares Capital vs. Triplepoint Venture Growth | Ares Capital vs. Sixth Street Specialty | Ares Capital vs. Main Street Capital | Ares Capital vs. Capital Southwest |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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