Correlation Between Gladstone Capital and Schroders PLC
Can any of the company-specific risk be diversified away by investing in both Gladstone Capital and Schroders PLC 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 Schroders PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Capital and Schroders PLC, you can compare the effects of market volatilities on Gladstone Capital and Schroders PLC 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 Schroders PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Capital and Schroders PLC.
Diversification Opportunities for Gladstone Capital and Schroders PLC
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gladstone and Schroders is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Capital and Schroders PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schroders PLC 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 Schroders PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schroders PLC has no effect on the direction of Gladstone Capital i.e., Gladstone Capital and Schroders PLC go up and down completely randomly.
Pair Corralation between Gladstone Capital and Schroders PLC
Given the investment horizon of 90 days Gladstone Capital is expected to generate 0.53 times more return on investment than Schroders PLC. However, Gladstone Capital is 1.88 times less risky than Schroders PLC. It trades about 0.19 of its potential returns per unit of risk. Schroders PLC is currently generating about -0.04 per unit of risk. If you would invest 2,169 in Gladstone Capital on September 3, 2024 and sell it today you would earn a total of 620.00 from holding Gladstone Capital or generate 28.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.4% |
| Values | Daily Returns |
Gladstone Capital vs. Schroders PLC
Performance |
| Timeline |
| Gladstone Capital |
| Schroders PLC |
Gladstone Capital and Schroders PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Capital and Schroders PLC
The main advantage of trading using opposite Gladstone Capital and Schroders PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Capital position performs unexpectedly, Schroders PLC 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 Schroders PLC will offset losses from the drop in Schroders PLC'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 |
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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