Correlation Between Carlyle Secured and Gladstone Capital

Can any of the company-specific risk be diversified away by investing in both Carlyle Secured 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 Carlyle Secured and Gladstone Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Carlyle Secured Lending and Gladstone Capital, you can compare the effects of market volatilities on Carlyle Secured 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 Carlyle Secured with a short position of Gladstone Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlyle Secured and Gladstone Capital.

Diversification Opportunities for Carlyle Secured and Gladstone Capital

0.27

Correlation Coefficient

Carlyle Secured  Gladstone Capital

Modest diversification

The 3 months correlation between Carlyle and Gladstone is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Carlyle Secured Lending and Gladstone Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Capital and Carlyle Secured 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 Carlyle Secured Lending 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 Carlyle Secured i.e., Carlyle Secured and Gladstone Capital go up and down completely randomly.

Pair Corralation between Carlyle Secured and Gladstone Capital

Given the investment horizon of 90 days Carlyle Secured is expected to generate 2.9 times less return on investment than Gladstone Capital. In addition to that, Carlyle Secured is 1.03 times more volatile than Gladstone Capital. It trades about 0.11 of its total potential returns per unit of risk. Gladstone Capital is currently generating about 0.34 per unit of volatility. If you would invest  2,220  in Gladstone Capital on September 12, 2024 and sell it today you would earn a total of  509.00  from holding Gladstone Capital or generate 22.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Carlyle Secured Lending  vs.  Gladstone Capital

Carlyle Secured Lending

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Carlyle Secured Lending are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental drivers, Carlyle Secured may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Gladstone Capital

Risk-Adjusted Performance

26 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Capital are ranked lower than 26 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Gladstone Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Carlyle Secured and Gladstone Capital

The main advantage of trading using opposite Carlyle Secured and Gladstone Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carlyle Secured 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.

The idea behind Carlyle Secured Lending and Gladstone Capital pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.