Correlation Between Gladstone Investment and Postal Savings
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and Postal Savings 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 Investment and Postal Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and Postal Savings Bank, you can compare the effects of market volatilities on Gladstone Investment and Postal Savings 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 Investment with a short position of Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and Postal Savings.
Diversification Opportunities for Gladstone Investment and Postal Savings
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gladstone and Postal is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank and Gladstone Investment 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 Investment are associated (or correlated) with Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Postal Savings go up and down completely randomly.
Pair Corralation between Gladstone Investment and Postal Savings
Assuming the 90 days horizon Gladstone Investment is expected to generate 1.08 times more return on investment than Postal Savings. However, Gladstone Investment is 1.08 times more volatile than Postal Savings Bank. It trades about -0.01 of its potential returns per unit of risk. Postal Savings Bank is currently generating about -0.03 per unit of risk. If you would invest 1,297 in Gladstone Investment on August 25, 2024 and sell it today you would lose (11.00) from holding Gladstone Investment or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. Postal Savings Bank
Performance |
| Timeline |
| Gladstone Investment |
| Postal Savings Bank |
Gladstone Investment and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and Postal Savings
The main advantage of trading using opposite Gladstone Investment and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.| Gladstone Investment vs. Lyxor 1 | Gladstone Investment vs. Xtrackers LevDAX | Gladstone Investment vs. Xtrackers ShortDAX |
| Postal Savings vs. Deutsche Bank Aktiengesellschaft | Postal Savings vs. Superior Plus Corp | Postal Savings vs. NMI Holdings | Postal Savings vs. Origin Agritech |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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