Correlation Between Gladstone Capital and Eaton Vance
Can any of the company-specific risk be diversified away by investing in both Gladstone Capital and Eaton Vance 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 Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Capital and Eaton Vance Municipal, you can compare the effects of market volatilities on Gladstone Capital and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Capital and Eaton Vance.
Diversification Opportunities for Gladstone Capital and Eaton Vance
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gladstone and Eaton is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Capital and Eaton Vance Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Municipal 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Municipal has no effect on the direction of Gladstone Capital i.e., Gladstone Capital and Eaton Vance go up and down completely randomly.
Pair Corralation between Gladstone Capital and Eaton Vance
Given the investment horizon of 90 days Gladstone Capital is expected to generate 1.83 times more return on investment than Eaton Vance. However, Gladstone Capital is 1.83 times more volatile than Eaton Vance Municipal. It trades about 0.35 of its potential returns per unit of risk. Eaton Vance Municipal is currently generating about 0.29 per unit of risk. If you would invest 2,773 in Gladstone Capital on October 22, 2024 and sell it today you would earn a total of 207.00 from holding Gladstone Capital or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Capital vs. Eaton Vance Municipal
Performance |
| Timeline |
| Gladstone Capital |
| Eaton Vance Municipal |
Gladstone Capital and Eaton Vance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Capital and Eaton Vance
The main advantage of trading using opposite Gladstone Capital and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Capital position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance'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 |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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