Correlation Between Golub Capital and Great Elm
Can any of the company-specific risk be diversified away by investing in both Golub Capital and Great Elm 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 Great Elm 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 Great Elm Group, you can compare the effects of market volatilities on Golub Capital and Great Elm 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 Great Elm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Golub Capital and Great Elm.
Diversification Opportunities for Golub Capital and Great Elm
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Golub and Great is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Golub Capital BDC and Great Elm Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Elm Group 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 Great Elm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Elm Group has no effect on the direction of Golub Capital i.e., Golub Capital and Great Elm go up and down completely randomly.
Pair Corralation between Golub Capital and Great Elm
Given the investment horizon of 90 days Golub Capital BDC is expected to generate 0.59 times more return on investment than Great Elm. However, Golub Capital BDC is 1.69 times less risky than Great Elm. It trades about 0.2 of its potential returns per unit of risk. Great Elm Group is currently generating about 0.01 per unit of risk. If you would invest 1,509 in Golub Capital BDC on September 1, 2024 and sell it today you would earn a total of 58.00 from holding Golub Capital BDC or generate 3.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Golub Capital BDC vs. Great Elm Group
Performance |
| Timeline |
| Golub Capital BDC |
| Great Elm Group |
Golub Capital and Great Elm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Golub Capital and Great Elm
The main advantage of trading using opposite Golub Capital and Great Elm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Golub Capital position performs unexpectedly, Great Elm 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 Great Elm will offset losses from the drop in Great Elm'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 |
| Great Elm vs. Investcorp Credit Management | Great Elm vs. Monroe Capital Corp | Great Elm vs. Allianzgi Convertible Income | Great Elm vs. John Hancock Income |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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