Correlation Between Gladstone Capital and OFS Capital
Can any of the company-specific risk be diversified away by investing in both Gladstone Capital and OFS 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 OFS 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 OFS Capital Corp, you can compare the effects of market volatilities on Gladstone Capital and OFS 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 OFS Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Capital and OFS Capital.
Diversification Opportunities for Gladstone Capital and OFS Capital
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gladstone and OFS is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Capital and OFS Capital Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFS Capital Corp 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 OFS Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFS Capital Corp has no effect on the direction of Gladstone Capital i.e., Gladstone Capital and OFS Capital go up and down completely randomly.
Pair Corralation between Gladstone Capital and OFS Capital
Given the investment horizon of 90 days Gladstone Capital is expected to generate 0.73 times more return on investment than OFS Capital. However, Gladstone Capital is 1.36 times less risky than OFS Capital. It trades about 0.16 of its potential returns per unit of risk. OFS Capital Corp 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 Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Capital vs. OFS Capital Corp
Performance |
| Timeline |
| Gladstone Capital |
| OFS Capital Corp |
Gladstone Capital and OFS Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Capital and OFS Capital
The main advantage of trading using opposite Gladstone Capital and OFS Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Capital position performs unexpectedly, OFS 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 OFS Capital will offset losses from the drop in OFS 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 |
| OFS Capital vs. Stellus Capital Investment | OFS Capital vs. Fidus Investment Corp | OFS Capital vs. Monroe Capital Corp | OFS Capital vs. New Mountain 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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