Correlation Between Gladstone Capital and New Mountain
Can any of the company-specific risk be diversified away by investing in both Gladstone Capital and New Mountain 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 New Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Capital and New Mountain Finance, you can compare the effects of market volatilities on Gladstone Capital and New Mountain 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 New Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Capital and New Mountain.
Diversification Opportunities for Gladstone Capital and New Mountain
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gladstone and New is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Capital and New Mountain Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Mountain 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 New Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Mountain Finance has no effect on the direction of Gladstone Capital i.e., Gladstone Capital and New Mountain go up and down completely randomly.
Pair Corralation between Gladstone Capital and New Mountain
Given the investment horizon of 90 days Gladstone Capital is expected to generate 1.43 times more return on investment than New Mountain. However, Gladstone Capital is 1.43 times more volatile than New Mountain Finance. It trades about 0.16 of its potential returns per unit of risk. New Mountain Finance is currently generating about -0.04 per unit of risk. If you would invest 2,133 in Gladstone Capital on August 24, 2024 and sell it today you would earn a total of 518.00 from holding Gladstone Capital or generate 24.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Capital vs. New Mountain Finance
Performance |
| Timeline |
| Gladstone Capital |
| New Mountain Finance |
Gladstone Capital and New Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Capital and New Mountain
The main advantage of trading using opposite Gladstone Capital and New Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Capital position performs unexpectedly, New Mountain 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 New Mountain will offset losses from the drop in New Mountain'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 |
| New Mountain vs. BlackRock TCP Capital | New Mountain vs. Carlyle Secured Lending | New Mountain vs. Sixth Street Specialty | New Mountain vs. WhiteHorse Finance |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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