Correlation Between Gladstone Investment and Vastned Retail
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and Vastned Retail 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 Vastned Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and Vastned Retail NV, you can compare the effects of market volatilities on Gladstone Investment and Vastned Retail 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 Vastned Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and Vastned Retail.
Diversification Opportunities for Gladstone Investment and Vastned Retail
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gladstone and Vastned is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Vastned Retail NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vastned Retail NV 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 Vastned Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vastned Retail NV has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Vastned Retail go up and down completely randomly.
Pair Corralation between Gladstone Investment and Vastned Retail
Assuming the 90 days horizon Gladstone Investment is expected to generate 2.4 times more return on investment than Vastned Retail. However, Gladstone Investment is 2.4 times more volatile than Vastned Retail NV. It trades about -0.01 of its potential returns per unit of risk. Vastned Retail NV is currently generating about -0.13 per unit of risk. If you would invest 1,297 in Gladstone Investment on August 25, 2024 and sell it today you would lose (11.00) from holding Gladstone Investment or give up 0.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. Vastned Retail NV
Performance |
| Timeline |
| Gladstone Investment |
| Vastned Retail NV |
Gladstone Investment and Vastned Retail Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and Vastned Retail
The main advantage of trading using opposite Gladstone Investment and Vastned Retail positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, Vastned Retail 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 Vastned Retail will offset losses from the drop in Vastned Retail's long position.| Gladstone Investment vs. Lyxor 1 | Gladstone Investment vs. Xtrackers LevDAX | Gladstone Investment vs. Xtrackers ShortDAX |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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