Correlation Between Gladstone Investment and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and SENECA FOODS-A 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 SENECA FOODS-A into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and SENECA FOODS A, you can compare the effects of market volatilities on Gladstone Investment and SENECA FOODS-A 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 SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and SENECA FOODS-A.
Diversification Opportunities for Gladstone Investment and SENECA FOODS-A
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gladstone and SENECA is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and SENECA FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENECA FOODS A 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 SENECA FOODS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENECA FOODS A has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between Gladstone Investment and SENECA FOODS-A
Assuming the 90 days horizon Gladstone Investment is expected to generate 2.04 times less return on investment than SENECA FOODS-A. But when comparing it to its historical volatility, Gladstone Investment is 1.22 times less risky than SENECA FOODS-A. It trades about 0.05 of its potential returns per unit of risk. SENECA FOODS A is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 5,250 in SENECA FOODS A on September 1, 2024 and sell it today you would earn a total of 1,200 from holding SENECA FOODS A or generate 22.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. SENECA FOODS A
Performance |
| Timeline |
| Gladstone Investment |
| SENECA FOODS A |
Gladstone Investment and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and SENECA FOODS-A
The main advantage of trading using opposite Gladstone Investment and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, SENECA FOODS-A 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 SENECA FOODS-A will offset losses from the drop in SENECA FOODS-A's long position.| Gladstone Investment vs. MINCO SILVER | Gladstone Investment vs. Perdoceo Education | Gladstone Investment vs. Grand Canyon Education | Gladstone Investment vs. RYU Apparel |
| SENECA FOODS-A vs. SIVERS SEMICONDUCTORS AB | SENECA FOODS-A vs. Darden Restaurants | SENECA FOODS-A vs. Reliance Steel Aluminum | SENECA FOODS-A vs. Q2M Managementberatung AG |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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