Correlation Between MEITUAN UNSPADR/2B and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both MEITUAN UNSPADR/2B and Gladstone Investment 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 MEITUAN UNSPADR/2B and Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEITUAN UNSPADR2B and Gladstone Investment, you can compare the effects of market volatilities on MEITUAN UNSPADR/2B and Gladstone Investment 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 MEITUAN UNSPADR/2B with a short position of Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEITUAN UNSPADR/2B and Gladstone Investment.
Diversification Opportunities for MEITUAN UNSPADR/2B and Gladstone Investment
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MEITUAN and Gladstone is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding MEITUAN UNSPADR2B and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and MEITUAN UNSPADR/2B 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 MEITUAN UNSPADR2B are associated (or correlated) with Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of MEITUAN UNSPADR/2B i.e., MEITUAN UNSPADR/2B and Gladstone Investment go up and down completely randomly.
Pair Corralation between MEITUAN UNSPADR/2B and Gladstone Investment
Assuming the 90 days trading horizon MEITUAN UNSPADR2B is expected to under-perform the Gladstone Investment. In addition to that, MEITUAN UNSPADR/2B is 1.8 times more volatile than Gladstone Investment. It trades about -0.05 of its total potential returns per unit of risk. Gladstone Investment is currently generating about 0.1 per unit of volatility. If you would invest 1,247 in Gladstone Investment on September 2, 2024 and sell it today you would earn a total of 54.00 from holding Gladstone Investment or generate 4.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
MEITUAN UNSPADR2B vs. Gladstone Investment
Performance |
| Timeline |
| MEITUAN UNSPADR/2B |
| Gladstone Investment |
MEITUAN UNSPADR/2B and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEITUAN UNSPADR/2B and Gladstone Investment
The main advantage of trading using opposite MEITUAN UNSPADR/2B and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEITUAN UNSPADR/2B position performs unexpectedly, Gladstone Investment 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 Gladstone Investment will offset losses from the drop in Gladstone Investment's long position.| MEITUAN UNSPADR/2B vs. ARISTOCRAT LEISURE | MEITUAN UNSPADR/2B vs. IMAGIN MEDICAL INC | MEITUAN UNSPADR/2B vs. Merit Medical Systems | MEITUAN UNSPADR/2B vs. URBAN OUTFITTERS |
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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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