Correlation Between FARM 51 and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both FARM 51 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 FARM 51 and Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FARM 51 GROUP and Gladstone Investment, you can compare the effects of market volatilities on FARM 51 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 FARM 51 with a short position of Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARM 51 and Gladstone Investment.
Diversification Opportunities for FARM 51 and Gladstone Investment
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between FARM and Gladstone is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding FARM 51 GROUP and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and FARM 51 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 FARM 51 GROUP 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 FARM 51 i.e., FARM 51 and Gladstone Investment go up and down completely randomly.
Pair Corralation between FARM 51 and Gladstone Investment
Assuming the 90 days horizon FARM 51 GROUP is expected to generate 1.88 times more return on investment than Gladstone Investment. However, FARM 51 is 1.88 times more volatile than Gladstone Investment. It trades about 0.07 of its potential returns per unit of risk. Gladstone Investment is currently generating about -0.05 per unit of risk. If you would invest 284.00 in FARM 51 GROUP on October 30, 2024 and sell it today you would earn a total of 16.00 from holding FARM 51 GROUP or generate 5.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FARM 51 GROUP vs. Gladstone Investment
Performance |
| Timeline |
| FARM 51 GROUP |
| Gladstone Investment |
FARM 51 and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARM 51 and Gladstone Investment
The main advantage of trading using opposite FARM 51 and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARM 51 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.| FARM 51 vs. Zoom Video Communications | FARM 51 vs. Tower One Wireless | FARM 51 vs. Southwest Airlines Co | FARM 51 vs. Cairo Communication SpA |
| Gladstone Investment vs. GigaMedia | Gladstone Investment vs. WT OFFSHORE | Gladstone Investment vs. CNVISION MEDIA | Gladstone Investment vs. Seven West Media |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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