Correlation Between Gladstone Investment and CHINA HUARONG
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and CHINA HUARONG 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 CHINA HUARONG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and CHINA HUARONG ENERHD 50, you can compare the effects of market volatilities on Gladstone Investment and CHINA HUARONG 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 CHINA HUARONG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and CHINA HUARONG.
Diversification Opportunities for Gladstone Investment and CHINA HUARONG
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gladstone and CHINA is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and CHINA HUARONG ENERHD 50 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHINA HUARONG ENERHD 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 CHINA HUARONG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHINA HUARONG ENERHD has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and CHINA HUARONG go up and down completely randomly.
Pair Corralation between Gladstone Investment and CHINA HUARONG
Assuming the 90 days horizon Gladstone Investment is expected to generate 52.3 times less return on investment than CHINA HUARONG. But when comparing it to its historical volatility, Gladstone Investment is 24.91 times less risky than CHINA HUARONG. It trades about 0.05 of its potential returns per unit of risk. CHINA HUARONG ENERHD 50 is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 0.60 in CHINA HUARONG ENERHD 50 on October 13, 2024 and sell it today you would lose (0.30) from holding CHINA HUARONG ENERHD 50 or give up 50.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. CHINA HUARONG ENERHD 50
Performance |
| Timeline |
| Gladstone Investment |
| CHINA HUARONG ENERHD |
Gladstone Investment and CHINA HUARONG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and CHINA HUARONG
The main advantage of trading using opposite Gladstone Investment and CHINA HUARONG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, CHINA HUARONG 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 CHINA HUARONG will offset losses from the drop in CHINA HUARONG's long position.| Gladstone Investment vs. Jacquet Metal Service | Gladstone Investment vs. Dentsply Sirona | Gladstone Investment vs. FIREWEED METALS P | Gladstone Investment vs. ANGANG STEEL H |
| CHINA HUARONG vs. HK Electric Investments | CHINA HUARONG vs. Gladstone Investment | CHINA HUARONG vs. GigaMedia | CHINA HUARONG vs. PROSIEBENSAT1 MEDIADR4 |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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