Correlation Between BlackRock TCP and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both BlackRock TCP 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 BlackRock TCP and Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock TCP Capital and Gladstone Investment, you can compare the effects of market volatilities on BlackRock TCP 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 BlackRock TCP with a short position of Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock TCP and Gladstone Investment.
Diversification Opportunities for BlackRock TCP and Gladstone Investment
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between BlackRock and Gladstone is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock TCP Capital and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and BlackRock TCP 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 BlackRock TCP Capital 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 BlackRock TCP i.e., BlackRock TCP and Gladstone Investment go up and down completely randomly.
Pair Corralation between BlackRock TCP and Gladstone Investment
Given the investment horizon of 90 days BlackRock TCP Capital is expected to under-perform the Gladstone Investment. In addition to that, BlackRock TCP is 1.39 times more volatile than Gladstone Investment. It trades about -0.05 of its total potential returns per unit of risk. Gladstone Investment is currently generating about 0.04 per unit of volatility. If you would invest 1,277 in Gladstone Investment on August 24, 2024 and sell it today you would earn a total of 73.00 from holding Gladstone Investment or generate 5.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock TCP Capital vs. Gladstone Investment
Performance |
| Timeline |
| BlackRock TCP Capital |
| Gladstone Investment |
BlackRock TCP and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock TCP and Gladstone Investment
The main advantage of trading using opposite BlackRock TCP and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock TCP 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.| BlackRock TCP vs. Triplepoint Venture Growth | BlackRock TCP vs. Sixth Street Specialty | BlackRock TCP vs. Golub Capital BDC | BlackRock TCP vs. New Mountain Finance |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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