Correlation Between Gladstone Capital and Adams Diversified
Can any of the company-specific risk be diversified away by investing in both Gladstone Capital and Adams Diversified 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 Capital and Adams Diversified into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Capital and Adams Diversified Equity, you can compare the effects of market volatilities on Gladstone Capital and Adams Diversified 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 Capital with a short position of Adams Diversified. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Capital and Adams Diversified.
Diversification Opportunities for Gladstone Capital and Adams Diversified
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gladstone and Adams is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Capital and Adams Diversified Equity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adams Diversified Equity and Gladstone 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 Gladstone Capital are associated (or correlated) with Adams Diversified. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adams Diversified Equity has no effect on the direction of Gladstone Capital i.e., Gladstone Capital and Adams Diversified go up and down completely randomly.
Pair Corralation between Gladstone Capital and Adams Diversified
Given the investment horizon of 90 days Gladstone Capital is expected to generate 1.21 times more return on investment than Adams Diversified. However, Gladstone Capital is 1.21 times more volatile than Adams Diversified Equity. It trades about 0.19 of its potential returns per unit of risk. Adams Diversified Equity is currently generating about 0.1 per unit of risk. If you would invest 2,169 in Gladstone Capital on September 3, 2024 and sell it today you would earn a total of 620.00 from holding Gladstone Capital or generate 28.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Capital vs. Adams Diversified Equity
Performance |
| Timeline |
| Gladstone Capital |
| Adams Diversified Equity |
Gladstone Capital and Adams Diversified Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Capital and Adams Diversified
The main advantage of trading using opposite Gladstone Capital and Adams Diversified positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Capital position performs unexpectedly, Adams Diversified 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 Adams Diversified will offset losses from the drop in Adams Diversified's long position.| Gladstone Capital vs. Main Street Capital | Gladstone Capital vs. PennantPark Floating Rate | Gladstone Capital vs. Horizon Technology Finance | Gladstone Capital vs. Prospect Capital |
| Adams Diversified vs. Tri Continental Closed | Adams Diversified vs. SRH Total Return | Adams Diversified vs. Putnam Municipal Opportunities | Adams Diversified vs. Tortoise Energy Independence |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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