Correlation Between Gladstone Investment and Gold Road
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and Gold Road 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 Gold Road into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and Gold Road Resources, you can compare the effects of market volatilities on Gladstone Investment and Gold Road 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 Gold Road. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and Gold Road.
Diversification Opportunities for Gladstone Investment and Gold Road
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gladstone and Gold is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Gold Road Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gold Road Resources 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 Gold Road. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gold Road Resources has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Gold Road go up and down completely randomly.
Pair Corralation between Gladstone Investment and Gold Road
Assuming the 90 days horizon Gladstone Investment is expected to under-perform the Gold Road. But the stock apears to be less risky and, when comparing its historical volatility, Gladstone Investment is 1.2 times less risky than Gold Road. The stock trades about -0.01 of its potential returns per unit of risk. The Gold Road Resources is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 128.00 in Gold Road Resources on December 11, 2024 and sell it today you would earn a total of 18.00 from holding Gold Road Resources or generate 14.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. Gold Road Resources
Performance |
| Timeline |
| Gladstone Investment |
| Gold Road Resources |
Gladstone Investment and Gold Road Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and Gold Road
The main advantage of trading using opposite Gladstone Investment and Gold Road positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, Gold Road 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 Gold Road will offset losses from the drop in Gold Road's long position.| Gladstone Investment vs. SmarTone Telecommunications Holdings | Gladstone Investment vs. QLEANAIR AB SK 50 | Gladstone Investment vs. Alaska Air Group | Gladstone Investment vs. DELTA AIR LINES |
| Gold Road vs. PennantPark Investment | Gold Road vs. JLF INVESTMENT | Gold Road vs. AGNC INVESTMENT | Gold Road vs. MEDCAW INVESTMENTS LS 01 |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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