Correlation Between Gladstone Investment and ScanSource
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and ScanSource 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 ScanSource into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and ScanSource, you can compare the effects of market volatilities on Gladstone Investment and ScanSource 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 ScanSource. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and ScanSource.
Diversification Opportunities for Gladstone Investment and ScanSource
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gladstone and ScanSource is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and ScanSource in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ScanSource 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 ScanSource. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ScanSource has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and ScanSource go up and down completely randomly.
Pair Corralation between Gladstone Investment and ScanSource
Assuming the 90 days horizon Gladstone Investment is expected to generate 2.16 times less return on investment than ScanSource. But when comparing it to its historical volatility, Gladstone Investment is 1.19 times less risky than ScanSource. It trades about 0.09 of its potential returns per unit of risk. ScanSource is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 4,640 in ScanSource on October 25, 2024 and sell it today you would earn a total of 180.00 from holding ScanSource or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. ScanSource
Performance |
| Timeline |
| Gladstone Investment |
| ScanSource |
Gladstone Investment and ScanSource Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and ScanSource
The main advantage of trading using opposite Gladstone Investment and ScanSource positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, ScanSource 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 ScanSource will offset losses from the drop in ScanSource's long position.| Gladstone Investment vs. Guangdong Investment Limited | Gladstone Investment vs. USWE SPORTS AB | Gladstone Investment vs. BII Railway Transportation | Gladstone Investment vs. CHRYSALIS INVESTMENTS LTD |
| ScanSource vs. GameStop Corp | ScanSource vs. Infrastrutture Wireless Italiane | ScanSource vs. OURGAME INTHOLDL 00005 | ScanSource vs. GigaMedia |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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