Correlation Between NYSE Composite and Gladstone Capital
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Gladstone Capital 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 NYSE Composite and Gladstone Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Gladstone Capital, you can compare the effects of market volatilities on NYSE Composite and Gladstone Capital 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 NYSE Composite with a short position of Gladstone Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Gladstone Capital.
Diversification Opportunities for NYSE Composite and Gladstone Capital
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NYSE and Gladstone is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Gladstone Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Capital and NYSE Composite 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 NYSE Composite are associated (or correlated) with Gladstone Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Capital has no effect on the direction of NYSE Composite i.e., NYSE Composite and Gladstone Capital go up and down completely randomly.
Pair Corralation between NYSE Composite and Gladstone Capital
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.88 times less return on investment than Gladstone Capital. But when comparing it to its historical volatility, NYSE Composite is 1.56 times less risky than Gladstone Capital. It trades about 0.08 of its potential returns per unit of risk. Gladstone Capital is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 1,649 in Gladstone Capital on August 30, 2024 and sell it today you would earn a total of 1,118 from holding Gladstone Capital or generate 67.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Gladstone Capital
Performance |
| Timeline |
NYSE Composite and Gladstone Capital Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Gladstone Capital
Pair trading matchups for Gladstone Capital
Pair Trading with NYSE Composite and Gladstone Capital
The main advantage of trading using opposite NYSE Composite and Gladstone Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Gladstone Capital 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 Capital will offset losses from the drop in Gladstone Capital's long position.| NYSE Composite vs. Delek Drilling | NYSE Composite vs. Helmerich and Payne | NYSE Composite vs. Waste Management | NYSE Composite vs. US Global Investors |
| Gladstone Capital vs. Main Street Capital | Gladstone Capital vs. PennantPark Floating Rate | Gladstone Capital vs. Horizon Technology Finance | Gladstone Capital 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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