Correlation Between BlackRock TCP and Golub Capital
Can any of the company-specific risk be diversified away by investing in both BlackRock TCP and Golub 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 BlackRock TCP and Golub Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BlackRock TCP Capital and Golub Capital BDC, you can compare the effects of market volatilities on BlackRock TCP and Golub 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 BlackRock TCP with a short position of Golub Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of BlackRock TCP and Golub Capital.
Diversification Opportunities for BlackRock TCP and Golub Capital
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BlackRock and Golub is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding BlackRock TCP Capital and Golub Capital BDC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golub Capital BDC and BlackRock TCP 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 BlackRock TCP Capital are associated (or correlated) with Golub Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golub Capital BDC has no effect on the direction of BlackRock TCP i.e., BlackRock TCP and Golub Capital go up and down completely randomly.
Pair Corralation between BlackRock TCP and Golub Capital
Given the investment horizon of 90 days BlackRock TCP is expected to generate 1.2 times less return on investment than Golub Capital. In addition to that, BlackRock TCP is 1.14 times more volatile than Golub Capital BDC. It trades about 0.11 of its total potential returns per unit of risk. Golub Capital BDC is currently generating about 0.14 per unit of volatility. If you would invest 1,510 in Golub Capital BDC on March 1, 2024 and sell it today you would earn a total of 122.00 from holding Golub Capital BDC or generate 8.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BlackRock TCP Capital vs. Golub Capital BDC
Performance |
| Timeline |
| BlackRock TCP Capital |
| Golub Capital BDC |
BlackRock TCP and Golub Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BlackRock TCP and Golub Capital
The main advantage of trading using opposite BlackRock TCP and Golub Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BlackRock TCP position performs unexpectedly, Golub 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 Golub Capital will offset losses from the drop in Golub Capital's long position.The idea behind BlackRock TCP Capital and Golub Capital BDC 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.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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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