Correlation Between Gladstone Investment and ENEOS Holdings
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and ENEOS Holdings 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 ENEOS Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and ENEOS Holdings, you can compare the effects of market volatilities on Gladstone Investment and ENEOS Holdings 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 ENEOS Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and ENEOS Holdings.
Diversification Opportunities for Gladstone Investment and ENEOS Holdings
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Gladstone and ENEOS is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and ENEOS Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ENEOS 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 ENEOS Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ENEOS Holdings has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and ENEOS Holdings go up and down completely randomly.
Pair Corralation between Gladstone Investment and ENEOS Holdings
Assuming the 90 days horizon Gladstone Investment is expected to generate 1.51 times less return on investment than ENEOS Holdings. But when comparing it to its historical volatility, Gladstone Investment is 1.12 times less risky than ENEOS Holdings. It trades about 0.16 of its potential returns per unit of risk. ENEOS Holdings is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 462.00 in ENEOS Holdings on September 5, 2024 and sell it today you would earn a total of 48.00 from holding ENEOS Holdings or generate 10.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. ENEOS Holdings
Performance |
| Timeline |
| Gladstone Investment |
| ENEOS Holdings |
Gladstone Investment and ENEOS Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and ENEOS Holdings
The main advantage of trading using opposite Gladstone Investment and ENEOS Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, ENEOS Holdings 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 ENEOS Holdings will offset losses from the drop in ENEOS Holdings' long position.| Gladstone Investment vs. AXWAY SOFTWARE EO | Gladstone Investment vs. Salesforce | Gladstone Investment vs. Sumitomo Mitsui Construction | Gladstone Investment vs. INFORMATION SVC GRP |
| ENEOS Holdings vs. Marathon Petroleum Corp | ENEOS Holdings vs. Neste Oyj | ENEOS Holdings vs. PTT OILRETBUS FOR BA10 |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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