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
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gladstone and Royalty is -0.47. 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 9.03 times less return on investment than Royalty Management. But when comparing it to its historical volatility, Gladstone Capital is 30.33 times less risky than Royalty Management. It trades about 0.34 of its potential returns per unit of risk. Royalty Management Holding is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1.56 in Royalty Management Holding on September 13, 2024 and sell it today you would lose (0.30) from holding Royalty Management Holding or give up 19.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 60.47% |
| 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. NETGEAR | Royalty Management vs. Haverty Furniture Companies | Royalty Management vs. BCE Inc | Royalty Management vs. Integral Ad Science |
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.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |