Correlation Between Gladstone Capital and Cohen Steers

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

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

Diversification Opportunities for Gladstone Capital and Cohen Steers

-0.06

Correlation Coefficient

Gladstone Capital  Cohen Steers

Good diversification

The 3 months correlation between Gladstone and Cohen is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Capital and Cohen Steers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cohen Steers and Gladstone Capital 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 Gladstone Capital are associated (or correlated) with Cohen Steers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cohen Steers has no effect on the direction of Gladstone Capital i.e., Gladstone Capital and Cohen Steers go up and down completely randomly.

Pair Corralation between Gladstone Capital and Cohen Steers

Given the investment horizon of 90 days Gladstone Capital is expected to generate 0.59 times more return on investment than Cohen Steers. However, Gladstone Capital is 1.69 times less risky than Cohen Steers. It trades about 0.14 of its potential returns per unit of risk. Cohen Steers is currently generating about 0.08 per unit of risk. If you would invest  2,013  in Gladstone Capital on October 7, 2024 and sell it today you would earn a total of  895.00  from holding Gladstone Capital or generate 44.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Gladstone Capital  vs.  Cohen Steers

Gladstone Capital

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Capital are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Gladstone Capital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Cohen Steers

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cohen Steers are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Cohen Steers is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Gladstone Capital and Cohen Steers

The main advantage of trading using opposite Gladstone Capital and Cohen Steers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Capital position performs unexpectedly, Cohen Steers 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 Cohen Steers will offset losses from the drop in Cohen Steers' long position.

The idea behind Gladstone Capital and Cohen Steers 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.