Correlation Between Tradeweb Markets and Gladstone Capital
Can any of the company-specific risk be diversified away by investing in both Tradeweb Markets 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 Tradeweb Markets and Gladstone Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradeweb Markets and Gladstone Capital, you can compare the effects of market volatilities on Tradeweb Markets 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 Tradeweb Markets with a short position of Gladstone Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradeweb Markets and Gladstone Capital.
Diversification Opportunities for Tradeweb Markets and Gladstone Capital
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Tradeweb and Gladstone is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Tradeweb Markets and Gladstone Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Capital and Tradeweb Markets 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 Tradeweb Markets 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 Tradeweb Markets i.e., Tradeweb Markets and Gladstone Capital go up and down completely randomly.
Pair Corralation between Tradeweb Markets and Gladstone Capital
Allowing for the 90-day total investment horizon Tradeweb Markets is expected to generate 1.5 times less return on investment than Gladstone Capital. In addition to that, Tradeweb Markets is 1.42 times more volatile than Gladstone Capital. It trades about 0.18 of its total potential returns per unit of risk. Gladstone Capital is currently generating about 0.38 per unit of volatility. If you would invest 2,228 in Gladstone Capital on August 30, 2024 and sell it today you would earn a total of 539.00 from holding Gladstone Capital or generate 24.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tradeweb Markets vs. Gladstone Capital
Performance |
| Timeline |
| Tradeweb Markets |
| Gladstone Capital |
Tradeweb Markets and Gladstone Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradeweb Markets and Gladstone Capital
The main advantage of trading using opposite Tradeweb Markets and Gladstone Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradeweb Markets 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.| Tradeweb Markets vs. Raymond James Financial | Tradeweb Markets vs. PJT Partners | Tradeweb Markets vs. Moelis Co | Tradeweb Markets vs. LPL Financial Holdings |
| Gladstone Capital vs. PennantPark Floating Rate | Gladstone Capital vs. Horizon Technology Finance | Gladstone Capital vs. Stellus Capital Investment | 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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