Correlation Between Gladstone Investment and NEXON
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and NEXON 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 NEXON into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and NEXON Co, you can compare the effects of market volatilities on Gladstone Investment and NEXON 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 NEXON. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and NEXON.
Diversification Opportunities for Gladstone Investment and NEXON
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gladstone and NEXON is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and NEXON Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXON 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 NEXON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXON has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and NEXON go up and down completely randomly.
Pair Corralation between Gladstone Investment and NEXON
Assuming the 90 days horizon Gladstone Investment is expected to generate 0.53 times more return on investment than NEXON. However, Gladstone Investment is 1.88 times less risky than NEXON. It trades about 0.0 of its potential returns per unit of risk. NEXON Co is currently generating about -0.08 per unit of risk. If you would invest 1,286 in Gladstone Investment on October 15, 2024 and sell it today you would lose (8.00) from holding Gladstone Investment or give up 0.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. NEXON Co
Performance |
| Timeline |
| Gladstone Investment |
| NEXON |
Gladstone Investment and NEXON Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and NEXON
The main advantage of trading using opposite Gladstone Investment and NEXON positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, NEXON 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 NEXON will offset losses from the drop in NEXON's long position.| Gladstone Investment vs. Titan Machinery | Gladstone Investment vs. CARSALESCOM | Gladstone Investment vs. INTER CARS SA | Gladstone Investment vs. Federal Agricultural Mortgage |
| NEXON vs. Commonwealth Bank of | NEXON vs. The Hanover Insurance | NEXON vs. Virtu Financial | NEXON vs. ADRIATIC METALS LS 013355 |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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