Correlation Between Gladstone Investment and Strategic Investments
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and Strategic Investments 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 Strategic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and Strategic Investments AS, you can compare the effects of market volatilities on Gladstone Investment and Strategic Investments 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 Strategic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and Strategic Investments.
Diversification Opportunities for Gladstone Investment and Strategic Investments
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gladstone and Strategic is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Strategic Investments AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Investments 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 Strategic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Investments has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Strategic Investments go up and down completely randomly.
Pair Corralation between Gladstone Investment and Strategic Investments
Assuming the 90 days horizon Gladstone Investment is expected to under-perform the Strategic Investments. But the stock apears to be less risky and, when comparing its historical volatility, Gladstone Investment is 3.16 times less risky than Strategic Investments. The stock trades about -0.05 of its potential returns per unit of risk. The Strategic Investments AS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Strategic Investments AS on August 28, 2024 and sell it today you would earn a total of 1.00 from holding Strategic Investments AS or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Gladstone Investment vs. Strategic Investments AS
Performance |
| Timeline |
| Gladstone Investment |
| Strategic Investments |
Gladstone Investment and Strategic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and Strategic Investments
The main advantage of trading using opposite Gladstone Investment and Strategic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, Strategic Investments 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 Strategic Investments will offset losses from the drop in Strategic Investments' 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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