Correlation Between MidCap Financial and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both MidCap Financial and Gladstone Investment 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 MidCap Financial and Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MidCap Financial Investment and Gladstone Investment, you can compare the effects of market volatilities on MidCap Financial and Gladstone Investment 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 MidCap Financial with a short position of Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of MidCap Financial and Gladstone Investment.
Diversification Opportunities for MidCap Financial and Gladstone Investment
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between MidCap and Gladstone is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding MidCap Financial Investment and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and MidCap Financial 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 MidCap Financial Investment are associated (or correlated) with Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of MidCap Financial i.e., MidCap Financial and Gladstone Investment go up and down completely randomly.
Pair Corralation between MidCap Financial and Gladstone Investment
Given the investment horizon of 90 days MidCap Financial Investment is expected to generate 0.9 times more return on investment than Gladstone Investment. However, MidCap Financial Investment is 1.11 times less risky than Gladstone Investment. It trades about 0.25 of its potential returns per unit of risk. Gladstone Investment is currently generating about 0.12 per unit of risk. If you would invest 1,316 in MidCap Financial Investment on September 13, 2024 and sell it today you would earn a total of 47.00 from holding MidCap Financial Investment or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
MidCap Financial Investment vs. Gladstone Investment
Performance |
| Timeline |
| MidCap Financial Inv |
| Gladstone Investment |
MidCap Financial and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MidCap Financial and Gladstone Investment
The main advantage of trading using opposite MidCap Financial and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MidCap Financial position performs unexpectedly, Gladstone Investment 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 Gladstone Investment will offset losses from the drop in Gladstone Investment's long position.| MidCap Financial vs. Visa Class A | MidCap Financial vs. Diamond Hill Investment | MidCap Financial vs. Distoken Acquisition | MidCap Financial vs. AllianceBernstein Holding LP |
| Gladstone Investment vs. PennantPark Floating Rate | Gladstone Investment vs. Horizon Technology Finance | Gladstone Investment vs. Stellus Capital Investment | Gladstone Investment vs. Prospect 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 CEOs Directory module to screen CEOs from public companies around the world.
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