Correlation Between Gladstone Investment and Internet Thailand
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and Internet Thailand 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 Internet Thailand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and Internet Thailand PCL, you can compare the effects of market volatilities on Gladstone Investment and Internet Thailand 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 Internet Thailand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and Internet Thailand.
Diversification Opportunities for Gladstone Investment and Internet Thailand
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gladstone and Internet is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Internet Thailand PCL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Internet Thailand PCL 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 Internet Thailand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Internet Thailand PCL has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Internet Thailand go up and down completely randomly.
Pair Corralation between Gladstone Investment and Internet Thailand
Assuming the 90 days horizon Gladstone Investment is expected to generate 5.84 times less return on investment than Internet Thailand. But when comparing it to its historical volatility, Gladstone Investment is 2.34 times less risky than Internet Thailand. It trades about 0.08 of its potential returns per unit of risk. Internet Thailand PCL is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 12.00 in Internet Thailand PCL on August 28, 2024 and sell it today you would earn a total of 6.00 from holding Internet Thailand PCL or generate 50.0% 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. Internet Thailand PCL
Performance |
| Timeline |
| Gladstone Investment |
| Internet Thailand PCL |
Gladstone Investment and Internet Thailand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and Internet Thailand
The main advantage of trading using opposite Gladstone Investment and Internet Thailand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, Internet Thailand 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 Internet Thailand will offset losses from the drop in Internet Thailand's long position.| Gladstone Investment vs. Lyxor 1 | Gladstone Investment vs. Xtrackers LevDAX | Gladstone Investment vs. Xtrackers ShortDAX |
| Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc | Internet Thailand vs. Apple Inc |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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