Correlation Between Gladstone Investment and Safety Insurance
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and Safety Insurance 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 Safety Insurance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and Safety Insurance Group, you can compare the effects of market volatilities on Gladstone Investment and Safety Insurance 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 Safety Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and Safety Insurance.
Diversification Opportunities for Gladstone Investment and Safety Insurance
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gladstone and Safety is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Safety Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safety Insurance 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 Safety Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safety Insurance has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Safety Insurance go up and down completely randomly.
Pair Corralation between Gladstone Investment and Safety Insurance
Assuming the 90 days horizon Gladstone Investment is expected to generate 0.79 times more return on investment than Safety Insurance. However, Gladstone Investment is 1.27 times less risky than Safety Insurance. It trades about 0.03 of its potential returns per unit of risk. Safety Insurance Group is currently generating about -0.17 per unit of risk. If you would invest 1,288 in Gladstone Investment on November 29, 2024 and sell it today you would earn a total of 11.00 from holding Gladstone Investment or generate 0.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. Safety Insurance Group
Performance |
| Timeline |
| Gladstone Investment |
| Safety Insurance |
Gladstone Investment and Safety Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and Safety Insurance
The main advantage of trading using opposite Gladstone Investment and Safety Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, Safety Insurance 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 Safety Insurance will offset losses from the drop in Safety Insurance's long position.| Gladstone Investment vs. REINET INVESTMENTS SCA | Gladstone Investment vs. Sunny Optical Technology | Gladstone Investment vs. SLR Investment Corp | Gladstone Investment vs. Yunnan Water Investment |
| Safety Insurance vs. Strategic Education | Safety Insurance vs. Boston Beer Co | Safety Insurance vs. DeVry Education Group | Safety Insurance vs. CAREER EDUCATION |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing |