Correlation Between Gladstone Investment and TFS FINANCIAL
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and TFS FINANCIAL 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 TFS FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and TFS FINANCIAL, you can compare the effects of market volatilities on Gladstone Investment and TFS FINANCIAL 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 TFS FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and TFS FINANCIAL.
Diversification Opportunities for Gladstone Investment and TFS FINANCIAL
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gladstone and TFS is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and TFS FINANCIAL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TFS FINANCIAL 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 TFS FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TFS FINANCIAL has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and TFS FINANCIAL go up and down completely randomly.
Pair Corralation between Gladstone Investment and TFS FINANCIAL
Assuming the 90 days horizon Gladstone Investment is expected to generate 2.11 times less return on investment than TFS FINANCIAL. In addition to that, Gladstone Investment is 1.03 times more volatile than TFS FINANCIAL. It trades about 0.09 of its total potential returns per unit of risk. TFS FINANCIAL is currently generating about 0.18 per unit of volatility. If you would invest 1,130 in TFS FINANCIAL on September 3, 2024 and sell it today you would earn a total of 200.00 from holding TFS FINANCIAL or generate 17.7% 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. TFS FINANCIAL
Performance |
| Timeline |
| Gladstone Investment |
| TFS FINANCIAL |
Gladstone Investment and TFS FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and TFS FINANCIAL
The main advantage of trading using opposite Gladstone Investment and TFS FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, TFS FINANCIAL 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 TFS FINANCIAL will offset losses from the drop in TFS FINANCIAL's long position.| Gladstone Investment vs. Perseus Mining Limited | Gladstone Investment vs. Sunstone Hotel Investors | Gladstone Investment vs. GRIFFIN MINING LTD | Gladstone Investment vs. Playa Hotels Resorts |
| TFS FINANCIAL vs. Gladstone Investment | TFS FINANCIAL vs. Infrastrutture Wireless Italiane | TFS FINANCIAL vs. WillScot Mobile Mini | TFS FINANCIAL vs. HK Electric Investments |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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