Correlation Between Gladstone Investment and AIR PRODCHEMICALS
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and AIR PRODCHEMICALS, you can compare the effects of market volatilities on Gladstone Investment and AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and AIR PRODCHEMICALS.
Diversification Opportunities for Gladstone Investment and AIR PRODCHEMICALS
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gladstone and AIR is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and AIR PRODCHEMICALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIR PRODCHEMICALS 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 AIR PRODCHEMICALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIR PRODCHEMICALS has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and AIR PRODCHEMICALS go up and down completely randomly.
Pair Corralation between Gladstone Investment and AIR PRODCHEMICALS
Assuming the 90 days horizon Gladstone Investment is expected to generate 0.68 times more return on investment than AIR PRODCHEMICALS. However, Gladstone Investment is 1.48 times less risky than AIR PRODCHEMICALS. It trades about -0.14 of its potential returns per unit of risk. AIR PRODCHEMICALS is currently generating about -0.15 per unit of risk. If you would invest 1,232 in Gladstone Investment on January 14, 2025 and sell it today you would lose (102.00) from holding Gladstone Investment or give up 8.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. AIR PRODCHEMICALS
Performance |
| Timeline |
| Gladstone Investment |
| AIR PRODCHEMICALS |
Gladstone Investment and AIR PRODCHEMICALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and AIR PRODCHEMICALS
The main advantage of trading using opposite Gladstone Investment and AIR PRODCHEMICALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, AIR PRODCHEMICALS 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 AIR PRODCHEMICALS will offset losses from the drop in AIR PRODCHEMICALS's long position.| Gladstone Investment vs. GOODYEAR T RUBBER | Gladstone Investment vs. Magic Software Enterprises | Gladstone Investment vs. APPLIED MATERIALS | Gladstone Investment vs. COGNYTE SOFTWARE LTD |
| AIR PRODCHEMICALS vs. Haier Smart Home | AIR PRODCHEMICALS vs. BOSTON BEER A | AIR PRODCHEMICALS vs. LEONS FURNITURE | AIR PRODCHEMICALS vs. Monster Beverage Corp |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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