Correlation Between Golub Capital and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Golub Capital and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Golub Capital and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golub Capital and Dow Jones.
Diversification Opportunities for Golub Capital and Dow Jones
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Golub and Dow is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Golub Capital BDC and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Golub Capital i.e., Golub Capital and Dow Jones go up and down completely randomly.
Pair Corralation between Golub Capital and Dow Jones
Given the investment horizon of 90 days Golub Capital BDC is expected to generate 1.33 times more return on investment than Dow Jones. However, Golub Capital is 1.33 times more volatile than Dow Jones Industrial. It trades about 0.08 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.08 per unit of risk. If you would invest 1,082 in Golub Capital BDC on August 28, 2024 and sell it today you would earn a total of 456.00 from holding Golub Capital BDC or generate 42.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golub Capital BDC vs. Dow Jones Industrial
Performance |
| Timeline |
Golub Capital and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Golub Capital BDC
Pair trading matchups for Golub Capital
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Golub Capital and Dow Jones
The main advantage of trading using opposite Golub Capital and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golub Capital position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' 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 |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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