Correlation Between Gladstone Capital and Royalty Management
Can any of the company-specific risk be diversified away by investing in both Gladstone Capital and Royalty Management 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 Royalty Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Capital and Royalty Management Holding, you can compare the effects of market volatilities on Gladstone Capital and Royalty Management 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 Royalty Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Capital and Royalty Management.
Diversification Opportunities for Gladstone Capital and Royalty Management
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gladstone and Royalty is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Capital and Royalty Management Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royalty Management 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 Royalty Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royalty Management has no effect on the direction of Gladstone Capital i.e., Gladstone Capital and Royalty Management go up and down completely randomly.
Pair Corralation between Gladstone Capital and Royalty Management
Given the investment horizon of 90 days Gladstone Capital is expected to generate 0.3 times more return on investment than Royalty Management. However, Gladstone Capital is 3.3 times less risky than Royalty Management. It trades about 0.36 of its potential returns per unit of risk. Royalty Management Holding is currently generating about -0.08 per unit of risk. If you would invest 2,507 in Gladstone Capital on September 12, 2024 and sell it today you would earn a total of 222.00 from holding Gladstone Capital or generate 8.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Capital vs. Royalty Management Holding
Performance |
| Timeline |
| Gladstone Capital |
| Royalty Management |
Gladstone Capital and Royalty Management Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Capital and Royalty Management
The main advantage of trading using opposite Gladstone Capital and Royalty Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Capital position performs unexpectedly, Royalty Management 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 Royalty Management will offset losses from the drop in Royalty Management'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 |
| Royalty Management vs. Gladstone Investment | Royalty Management vs. Stellus Capital Investment | Royalty Management vs. Prospect Capital | Royalty Management 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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