Correlation Between Gladstone Capital and Logan Ridge
Can any of the company-specific risk be diversified away by investing in both Gladstone Capital and Logan Ridge 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 Logan Ridge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Capital and Logan Ridge Finance, you can compare the effects of market volatilities on Gladstone Capital and Logan Ridge 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 Logan Ridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Capital and Logan Ridge.
Diversification Opportunities for Gladstone Capital and Logan Ridge
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gladstone and Logan is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Capital and Logan Ridge Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Logan Ridge Finance 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 Logan Ridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Logan Ridge Finance has no effect on the direction of Gladstone Capital i.e., Gladstone Capital and Logan Ridge go up and down completely randomly.
Pair Corralation between Gladstone Capital and Logan Ridge
Given the investment horizon of 90 days Gladstone Capital is expected to generate 1.0 times more return on investment than Logan Ridge. However, Gladstone Capital is 1.0 times less risky than Logan Ridge. It trades about 0.11 of its potential returns per unit of risk. Logan Ridge Finance is currently generating about 0.05 per unit of risk. If you would invest 1,551 in Gladstone Capital on September 12, 2024 and sell it today you would earn a total of 1,178 from holding Gladstone Capital or generate 75.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Capital vs. Logan Ridge Finance
Performance |
| Timeline |
| Gladstone Capital |
| Logan Ridge Finance |
Gladstone Capital and Logan Ridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Capital and Logan Ridge
The main advantage of trading using opposite Gladstone Capital and Logan Ridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Capital position performs unexpectedly, Logan Ridge 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 Logan Ridge will offset losses from the drop in Logan Ridge'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 |
| Logan Ridge vs. Gladstone Investment | Logan Ridge vs. Stellus Capital Investment | Logan Ridge vs. Prospect Capital | Logan Ridge vs. Gladstone 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |