Correlation Between Gladstone Capital and Cornerstone Strategic
Can any of the company-specific risk be diversified away by investing in both Gladstone Capital and Cornerstone Strategic 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 Cornerstone Strategic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Capital and Cornerstone Strategic Return, you can compare the effects of market volatilities on Gladstone Capital and Cornerstone Strategic 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 Cornerstone Strategic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Capital and Cornerstone Strategic.
Diversification Opportunities for Gladstone Capital and Cornerstone Strategic
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Gladstone and Cornerstone is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Capital and Cornerstone Strategic Return in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cornerstone Strategic 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 Cornerstone Strategic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cornerstone Strategic has no effect on the direction of Gladstone Capital i.e., Gladstone Capital and Cornerstone Strategic go up and down completely randomly.
Pair Corralation between Gladstone Capital and Cornerstone Strategic
Given the investment horizon of 90 days Gladstone Capital is expected to generate 1.05 times more return on investment than Cornerstone Strategic. However, Gladstone Capital is 1.05 times more volatile than Cornerstone Strategic Return. It trades about 0.42 of its potential returns per unit of risk. Cornerstone Strategic Return is currently generating about 0.37 per unit of risk. If you would invest 2,418 in Gladstone Capital on August 25, 2024 and sell it today you would earn a total of 253.00 from holding Gladstone Capital or generate 10.46% 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. Cornerstone Strategic Return
Performance |
| Timeline |
| Gladstone Capital |
| Cornerstone Strategic |
Gladstone Capital and Cornerstone Strategic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Capital and Cornerstone Strategic
The main advantage of trading using opposite Gladstone Capital and Cornerstone Strategic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Capital position performs unexpectedly, Cornerstone Strategic 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 Cornerstone Strategic will offset losses from the drop in Cornerstone Strategic'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 |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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