Correlation Between Gladstone Investment and Deutsche Pfandbriefbank
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and Deutsche Pfandbriefbank AG, you can compare the effects of market volatilities on Gladstone Investment and Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and Deutsche Pfandbriefbank.
Diversification Opportunities for Gladstone Investment and Deutsche Pfandbriefbank
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gladstone and Deutsche is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Deutsche Pfandbriefbank AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deutsche Pfandbriefbank has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Deutsche Pfandbriefbank go up and down completely randomly.
Pair Corralation between Gladstone Investment and Deutsche Pfandbriefbank
Assuming the 90 days horizon Gladstone Investment is expected to generate 1.18 times more return on investment than Deutsche Pfandbriefbank. However, Gladstone Investment is 1.18 times more volatile than Deutsche Pfandbriefbank AG. It trades about 0.02 of its potential returns per unit of risk. Deutsche Pfandbriefbank AG is currently generating about -0.18 per unit of risk. If you would invest 1,298 in Gladstone Investment on September 15, 2024 and sell it today you would earn a total of 7.00 from holding Gladstone Investment or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Gladstone Investment vs. Deutsche Pfandbriefbank AG
Performance |
| Timeline |
| Gladstone Investment |
| Deutsche Pfandbriefbank |
Gladstone Investment and Deutsche Pfandbriefbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and Deutsche Pfandbriefbank
The main advantage of trading using opposite Gladstone Investment and Deutsche Pfandbriefbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, Deutsche Pfandbriefbank 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 Deutsche Pfandbriefbank will offset losses from the drop in Deutsche Pfandbriefbank's long position.| Gladstone Investment vs. Lyxor 1 | Gladstone Investment vs. Xtrackers ShortDAX | Gladstone Investment vs. Xtrackers LevDAX |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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