Correlation Between Gladstone Capital and WhiteHorse Finance
Can any of the company-specific risk be diversified away by investing in both Gladstone Capital and WhiteHorse Finance 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 WhiteHorse Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Capital and WhiteHorse Finance, you can compare the effects of market volatilities on Gladstone Capital and WhiteHorse Finance 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 WhiteHorse Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Capital and WhiteHorse Finance.
Diversification Opportunities for Gladstone Capital and WhiteHorse Finance
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gladstone and WhiteHorse is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Capital and WhiteHorse Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WhiteHorse 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 WhiteHorse Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WhiteHorse Finance has no effect on the direction of Gladstone Capital i.e., Gladstone Capital and WhiteHorse Finance go up and down completely randomly.
Pair Corralation between Gladstone Capital and WhiteHorse Finance
Given the investment horizon of 90 days Gladstone Capital is expected to generate 0.79 times more return on investment than WhiteHorse Finance. However, Gladstone Capital is 1.26 times less risky than WhiteHorse Finance. It trades about 0.42 of its potential returns per unit of risk. WhiteHorse Finance is currently generating about -0.33 per unit of risk. If you would invest 2,418 in Gladstone Capital on August 25, 2024 and sell it today you would earn a total of 253.00 from holding Gladstone Capital or generate 10.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Capital vs. WhiteHorse Finance
Performance |
| Timeline |
| Gladstone Capital |
| WhiteHorse Finance |
Gladstone Capital and WhiteHorse Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Capital and WhiteHorse Finance
The main advantage of trading using opposite Gladstone Capital and WhiteHorse Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Capital position performs unexpectedly, WhiteHorse Finance 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 WhiteHorse Finance will offset losses from the drop in WhiteHorse Finance'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 |
| WhiteHorse Finance vs. Monroe Capital Corp | WhiteHorse Finance vs. Portman Ridge Finance | WhiteHorse Finance vs. Fidus Investment Corp | WhiteHorse Finance vs. Diamond Hill Investment |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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