Correlation Between Gladstone Investment and Bridge Investment
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and Bridge 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 Gladstone Investment and Bridge Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and Bridge Investment Group, you can compare the effects of market volatilities on Gladstone Investment and Bridge 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 Gladstone Investment with a short position of Bridge Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and Bridge Investment.
Diversification Opportunities for Gladstone Investment and Bridge Investment
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gladstone and Bridge is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Bridge Investment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bridge Investment 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 Bridge Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bridge Investment has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Bridge Investment go up and down completely randomly.
Pair Corralation between Gladstone Investment and Bridge Investment
Given the investment horizon of 90 days Gladstone Investment is expected to generate 0.54 times more return on investment than Bridge Investment. However, Gladstone Investment is 1.86 times less risky than Bridge Investment. It trades about 0.12 of its potential returns per unit of risk. Bridge Investment Group is currently generating about -0.06 per unit of risk. If you would invest 1,345 in Gladstone Investment on September 13, 2024 and sell it today you would earn a total of 26.00 from holding Gladstone Investment or generate 1.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Gladstone Investment vs. Bridge Investment Group
Performance |
| Timeline |
| Gladstone Investment |
| Bridge Investment |
Gladstone Investment and Bridge Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and Bridge Investment
The main advantage of trading using opposite Gladstone Investment and Bridge Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, Bridge 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 Bridge Investment will offset losses from the drop in Bridge Investment's long position.| Gladstone Investment vs. PennantPark Floating Rate | Gladstone Investment vs. Horizon Technology Finance | Gladstone Investment vs. Stellus Capital Investment | Gladstone Investment vs. Prospect Capital |
| Bridge Investment vs. Federated Premier Municipal | Bridge Investment vs. Blackrock Muniyield | Bridge Investment vs. Diamond Hill Investment | Bridge Investment vs. NXG NextGen Infrastructure |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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