Correlation Between Gladstone Investment and ITV Plc
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and ITV Plc 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 ITV Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and ITV plc, you can compare the effects of market volatilities on Gladstone Investment and ITV Plc 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 ITV Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and ITV Plc.
Diversification Opportunities for Gladstone Investment and ITV Plc
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gladstone and ITV is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and ITV plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ITV plc 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 ITV Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ITV plc has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and ITV Plc go up and down completely randomly.
Pair Corralation between Gladstone Investment and ITV Plc
Assuming the 90 days horizon Gladstone Investment is expected to generate 0.59 times more return on investment than ITV Plc. However, Gladstone Investment is 1.7 times less risky than ITV Plc. It trades about 0.06 of its potential returns per unit of risk. ITV plc is currently generating about 0.03 per unit of risk. If you would invest 879.00 in Gladstone Investment on September 14, 2024 and sell it today you would earn a total of 423.00 from holding Gladstone Investment or generate 48.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. ITV plc
Performance |
| Timeline |
| Gladstone Investment |
| ITV plc |
Gladstone Investment and ITV Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and ITV Plc
The main advantage of trading using opposite Gladstone Investment and ITV Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, ITV Plc 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 ITV Plc will offset losses from the drop in ITV Plc's long position.| Gladstone Investment vs. Lyxor 1 | Gladstone Investment vs. Xtrackers ShortDAX | Gladstone Investment vs. Xtrackers LevDAX |
| ITV Plc vs. Entravision Communications | ITV Plc vs. Hemisphere Energy Corp | ITV Plc vs. National Bank Holdings | ITV Plc vs. Computer And Technologies |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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