Correlation Between Raymond James and Gladstone Capital

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

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

Diversification Opportunities for Raymond James and Gladstone Capital

0.77

Correlation Coefficient

Raymond James  Gladstone Capital

Poor diversification

The 3 months correlation between Raymond and Gladstone is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Raymond James Financial and Gladstone Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Capital and Raymond James 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 Raymond James Financial 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 Raymond James i.e., Raymond James and Gladstone Capital go up and down completely randomly.

Pair Corralation between Raymond James and Gladstone Capital

Assuming the 90 days trading horizon Raymond James is expected to generate 1.13 times less return on investment than Gladstone Capital. But when comparing it to its historical volatility, Raymond James Financial is 1.27 times less risky than Gladstone Capital. It trades about 0.15 of its potential returns per unit of risk. Gladstone Capital is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  2,486  in Gladstone Capital on August 31, 2024 and sell it today you would earn a total of  36.00  from holding Gladstone Capital or generate 1.45% return on investment over 90 days.

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

Raymond James Financial  vs.  Gladstone Capital

Raymond James Financial

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Raymond James Financial are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong technical and fundamental indicators, Raymond James is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Gladstone Capital

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Capital are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, Gladstone Capital is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Raymond James and Gladstone Capital

The main advantage of trading using opposite Raymond James and Gladstone Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Raymond James 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 Raymond James Financial 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 Commodity Directory module to find actively traded commodities issued by global exchanges.