Correlation Between Gladstone Capital and Dynex Capital
Can any of the company-specific risk be diversified away by investing in both Gladstone Capital and Dynex 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 Gladstone Capital and Dynex Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Capital and Dynex Capital, you can compare the effects of market volatilities on Gladstone Capital and Dynex 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 Gladstone Capital with a short position of Dynex Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Capital and Dynex Capital.
Diversification Opportunities for Gladstone Capital and Dynex Capital
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gladstone and Dynex is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Capital and Dynex Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dynex Capital 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 Dynex Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dynex Capital has no effect on the direction of Gladstone Capital i.e., Gladstone Capital and Dynex Capital go up and down completely randomly.
Pair Corralation between Gladstone Capital and Dynex Capital
Given the investment horizon of 90 days Gladstone Capital is expected to generate 1.28 times more return on investment than Dynex Capital. However, Gladstone Capital is 1.28 times more volatile than Dynex Capital. It trades about 0.32 of its potential returns per unit of risk. Dynex Capital is currently generating about 0.06 per unit of risk. If you would invest 2,449 in Gladstone Capital on August 23, 2024 and sell it today you would earn a total of 202.00 from holding Gladstone Capital or generate 8.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Capital vs. Dynex Capital
Performance |
| Timeline |
| Gladstone Capital |
| Dynex Capital |
Gladstone Capital and Dynex Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Capital and Dynex Capital
The main advantage of trading using opposite Gladstone Capital and Dynex Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Capital position performs unexpectedly, Dynex 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 Dynex Capital will offset losses from the drop in Dynex Capital'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 |
| Dynex Capital vs. Ellington Residential Mortgage | Dynex Capital vs. Orchid Island Capital | Dynex Capital vs. ARMOUR Residential REIT | Dynex Capital vs. Ellington Financial |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |