Correlation Between Gladstone Investment and Hitachi Construction
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and Hitachi Construction 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 Hitachi Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and Hitachi Construction Machinery, you can compare the effects of market volatilities on Gladstone Investment and Hitachi Construction 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 Hitachi Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and Hitachi Construction.
Diversification Opportunities for Gladstone Investment and Hitachi Construction
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gladstone and Hitachi is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Hitachi Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitachi Construction 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 Hitachi Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitachi Construction has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Hitachi Construction go up and down completely randomly.
Pair Corralation between Gladstone Investment and Hitachi Construction
Assuming the 90 days horizon Gladstone Investment is expected to under-perform the Hitachi Construction. But the stock apears to be less risky and, when comparing its historical volatility, Gladstone Investment is 1.21 times less risky than Hitachi Construction. The stock trades about -0.01 of its potential returns per unit of risk. The Hitachi Construction Machinery is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 2,040 in Hitachi Construction Machinery on August 25, 2024 and sell it today you would lose (20.00) from holding Hitachi Construction Machinery or give up 0.98% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. Hitachi Construction Machinery
Performance |
| Timeline |
| Gladstone Investment |
| Hitachi Construction |
Gladstone Investment and Hitachi Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and Hitachi Construction
The main advantage of trading using opposite Gladstone Investment and Hitachi Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, Hitachi Construction 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 Hitachi Construction will offset losses from the drop in Hitachi Construction's long position.| Gladstone Investment vs. Lyxor 1 | Gladstone Investment vs. Xtrackers LevDAX | Gladstone Investment vs. Xtrackers ShortDAX |
| Hitachi Construction vs. KUBOTA P ADR20 | Hitachi Construction vs. Superior Plus Corp | Hitachi Construction vs. NMI Holdings | Hitachi Construction vs. Origin Agritech |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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