Correlation Between Gladstone Investment and STAG Industrial
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and STAG Industrial 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 STAG Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and STAG Industrial, you can compare the effects of market volatilities on Gladstone Investment and STAG Industrial 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 STAG Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and STAG Industrial.
Diversification Opportunities for Gladstone Investment and STAG Industrial
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Gladstone and STAG is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and STAG Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAG Industrial 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 STAG Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STAG Industrial has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and STAG Industrial go up and down completely randomly.
Pair Corralation between Gladstone Investment and STAG Industrial
Given the investment horizon of 90 days Gladstone Investment is expected to under-perform the STAG Industrial. In addition to that, Gladstone Investment is 1.05 times more volatile than STAG Industrial. It trades about -0.14 of its total potential returns per unit of risk. STAG Industrial is currently generating about -0.04 per unit of volatility. If you would invest 3,693 in STAG Industrial on August 26, 2024 and sell it today you would lose (45.00) from holding STAG Industrial or give up 1.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. STAG Industrial
Performance |
| Timeline |
| Gladstone Investment |
| STAG Industrial |
Gladstone Investment and STAG Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and STAG Industrial
The main advantage of trading using opposite Gladstone Investment and STAG Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, STAG Industrial 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 STAG Industrial will offset losses from the drop in STAG Industrial'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 |
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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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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