Correlation Between Gladstone Investment and Blackstone
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and Blackstone 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 Blackstone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and Blackstone Group, you can compare the effects of market volatilities on Gladstone Investment and Blackstone 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 Blackstone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and Blackstone.
Diversification Opportunities for Gladstone Investment and Blackstone
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gladstone and Blackstone is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group 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 Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Group has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Blackstone go up and down completely randomly.
Pair Corralation between Gladstone Investment and Blackstone
Assuming the 90 days horizon Gladstone Investment is expected to generate 2.44 times less return on investment than Blackstone. But when comparing it to its historical volatility, Gladstone Investment is 1.37 times less risky than Blackstone. It trades about 0.06 of its potential returns per unit of risk. Blackstone Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 6,616 in Blackstone Group on September 13, 2024 and sell it today you would earn a total of 11,186 from holding Blackstone Group or generate 169.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. Blackstone Group
Performance |
| Timeline |
| Gladstone Investment |
| Blackstone Group |
Gladstone Investment and Blackstone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and Blackstone
The main advantage of trading using opposite Gladstone Investment and Blackstone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, Blackstone 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 Blackstone will offset losses from the drop in Blackstone's long position.| Gladstone Investment vs. Lyxor 1 | Gladstone Investment vs. Xtrackers ShortDAX | Gladstone Investment vs. Xtrackers LevDAX |
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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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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