Correlation Between Gladstone Investment and Apple
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and Apple 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 Apple into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and Apple Inc, you can compare the effects of market volatilities on Gladstone Investment and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and Apple.
Diversification Opportunities for Gladstone Investment and Apple
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gladstone and Apple is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Apple go up and down completely randomly.
Pair Corralation between Gladstone Investment and Apple
Assuming the 90 days horizon Gladstone Investment is expected to generate 1.38 times less return on investment than Apple. In addition to that, Gladstone Investment is 1.03 times more volatile than Apple Inc. It trades about 0.05 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.07 per unit of volatility. If you would invest 13,911 in Apple Inc on August 26, 2024 and sell it today you would earn a total of 7,939 from holding Apple Inc or generate 57.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. Apple Inc
Performance |
| Timeline |
| Gladstone Investment |
| Apple Inc |
Gladstone Investment and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and Apple
The main advantage of trading using opposite Gladstone Investment and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Gladstone Investment vs. Lyxor 1 | Gladstone Investment vs. Xtrackers LevDAX | Gladstone Investment vs. Xtrackers ShortDAX |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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