Correlation Between Gladstone Capital and Western Asset
Can any of the company-specific risk be diversified away by investing in both Gladstone Capital and Western Asset 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 Western Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Capital and Western Asset Emerging, you can compare the effects of market volatilities on Gladstone Capital and Western Asset 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 Western Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Capital and Western Asset.
Diversification Opportunities for Gladstone Capital and Western Asset
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gladstone and Western is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Capital and Western Asset Emerging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Asset Emerging 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 Western Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Asset Emerging has no effect on the direction of Gladstone Capital i.e., Gladstone Capital and Western Asset go up and down completely randomly.
Pair Corralation between Gladstone Capital and Western Asset
Given the investment horizon of 90 days Gladstone Capital is expected to generate 1.66 times more return on investment than Western Asset. However, Gladstone Capital is 1.66 times more volatile than Western Asset Emerging. It trades about 0.19 of its potential returns per unit of risk. Western Asset Emerging is currently generating about 0.13 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 Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Capital vs. Western Asset Emerging
Performance |
| Timeline |
| Gladstone Capital |
| Western Asset Emerging |
Gladstone Capital and Western Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Capital and Western Asset
The main advantage of trading using opposite Gladstone Capital and Western Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Capital position performs unexpectedly, Western Asset 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 Western Asset will offset losses from the drop in Western Asset'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 |
| Western Asset vs. Tekla Healthcare Investors | Western Asset vs. Tekla Life Sciences | Western Asset vs. Cohen Steers Reit | Western Asset vs. XAI Octagon Floating |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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