Correlation Between Gladstone Investment and Geely Automobile
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and Geely Automobile 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 Geely Automobile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and Geely Automobile Holdings, you can compare the effects of market volatilities on Gladstone Investment and Geely Automobile 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 Geely Automobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and Geely Automobile.
Diversification Opportunities for Gladstone Investment and Geely Automobile
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gladstone and Geely is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Geely Automobile Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Geely Automobile Holdings 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 Geely Automobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Geely Automobile Holdings has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Geely Automobile go up and down completely randomly.
Pair Corralation between Gladstone Investment and Geely Automobile
Assuming the 90 days horizon Gladstone Investment is expected to generate 1.79 times less return on investment than Geely Automobile. But when comparing it to its historical volatility, Gladstone Investment is 1.78 times less risky than Geely Automobile. It trades about 0.05 of its potential returns per unit of risk. Geely Automobile Holdings is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 94.00 in Geely Automobile Holdings on September 4, 2024 and sell it today you would earn a total of 73.00 from holding Geely Automobile Holdings or generate 77.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.8% |
| Values | Daily Returns |
Gladstone Investment vs. Geely Automobile Holdings
Performance |
| Timeline |
| Gladstone Investment |
| Geely Automobile Holdings |
Gladstone Investment and Geely Automobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and Geely Automobile
The main advantage of trading using opposite Gladstone Investment and Geely Automobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, Geely Automobile 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 Geely Automobile will offset losses from the drop in Geely Automobile's long position.| Gladstone Investment vs. AXWAY SOFTWARE EO | Gladstone Investment vs. Salesforce | Gladstone Investment vs. Sumitomo Mitsui Construction | Gladstone Investment vs. INFORMATION SVC GRP |
| Geely Automobile vs. Tesla Inc | Geely Automobile vs. Toyota Motor | Geely Automobile vs. BYD Company Limited | Geely Automobile vs. Superior Plus 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |