Correlation Between Victory Capital and Gladstone Investment

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

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

Diversification Opportunities for Victory Capital and Gladstone Investment

-0.62

Correlation Coefficient

Victory Capital  Gladstone Investment

Excellent diversification

The 3 months correlation between Victory and Gladstone is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Victory Capital Holdings and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and Victory 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 Victory Capital Holdings 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 Victory Capital i.e., Victory Capital and Gladstone Investment go up and down completely randomly.

Pair Corralation between Victory Capital and Gladstone Investment

Given the investment horizon of 90 days Victory Capital Holdings is expected to under-perform the Gladstone Investment. In addition to that, Victory Capital is 4.56 times more volatile than Gladstone Investment. It trades about -0.08 of its total potential returns per unit of risk. Gladstone Investment is currently generating about 0.11 per unit of volatility. If you would invest  2,320  in Gladstone Investment on September 20, 2024 and sell it today you would earn a total of  22.00  from holding Gladstone Investment or generate 0.95% return on investment over 90 days.

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

Victory Capital Holdings  vs.  Gladstone Investment

Victory Capital Holdings

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Victory Capital Holdings are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Victory Capital reported solid returns over the last few months and may actually be approaching a breakup point.

Gladstone Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gladstone Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Gladstone Investment is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Victory Capital and Gladstone Investment

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

The idea behind Victory Capital Holdings and Gladstone Investment 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.