Correlation Between B Riley and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both B Riley 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 B Riley and Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between B Riley Financial and Gladstone Investment, you can compare the effects of market volatilities on B Riley 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 B Riley with a short position of Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Riley and Gladstone Investment.
Diversification Opportunities for B Riley and Gladstone Investment
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between RILYT and Gladstone is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding B Riley Financial and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and B Riley 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 B Riley Financial 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 B Riley i.e., B Riley and Gladstone Investment go up and down completely randomly.
Pair Corralation between B Riley and Gladstone Investment
Assuming the 90 days horizon B Riley Financial is expected to under-perform the Gladstone Investment. In addition to that, B Riley is 11.48 times more volatile than Gladstone Investment. It trades about 0.0 of its total potential returns per unit of risk. Gladstone Investment is currently generating about 0.06 per unit of volatility. If you would invest 2,298 in Gladstone Investment on September 20, 2024 and sell it today you would earn a total of 170.00 from holding Gladstone Investment or generate 7.4% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 99.6% |
Values | Daily Returns |
B Riley Financial vs. Gladstone Investment
Performance |
Timeline |
B Riley Financial |
Gladstone Investment |
B Riley and Gladstone Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with B Riley and Gladstone Investment
The main advantage of trading using opposite B Riley and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if B Riley 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.B Riley vs. Oxford Lane Capital | B Riley vs. Oxford Lane Capital | B Riley vs. Eagle Point Credit | B Riley vs. Aquagold International |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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