Correlation Between Gladstone Capital and Vinci Partners

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

By analyzing existing cross correlation between Gladstone Capital and Vinci Partners Investments, you can compare the effects of market volatilities on Gladstone Capital and Vinci Partners 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 Vinci Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Capital and Vinci Partners.

Diversification Opportunities for Gladstone Capital and Vinci Partners

0.54

Correlation Coefficient

Gladstone Capital  Vinci Partners

Very weak diversification

The 3 months correlation between Gladstone and Vinci is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Capital and Vinci Partners Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinci Partners Inves 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 Vinci Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinci Partners Inves has no effect on the direction of Gladstone Capital i.e., Gladstone Capital and Vinci Partners go up and down completely randomly.

Pair Corralation between Gladstone Capital and Vinci Partners

Given the investment horizon of 90 days Gladstone Capital is expected to generate 0.67 times more return on investment than Vinci Partners. However, Gladstone Capital is 1.5 times less risky than Vinci Partners. It trades about 0.14 of its potential returns per unit of risk. Vinci Partners Investments is currently generating about 0.02 per unit of risk. If you would invest  1,896  in Gladstone Capital on September 12, 2024 and sell it today you would earn a total of  840.50  from holding Gladstone Capital or generate 44.33% return on investment over 90 days.

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

Gladstone Capital  vs.  Vinci Partners Investments

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.

Vinci Partners Inves

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Vinci Partners Investments are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, Vinci Partners may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gladstone Capital and Vinci Partners

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

The idea behind Gladstone Capital and Vinci Partners Investments 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..