Correlation Between Gladstone Investment and Gabelli Multimedia
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and Gabelli Multimedia 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 Gabelli Multimedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and The Gabelli Multimedia, you can compare the effects of market volatilities on Gladstone Investment and Gabelli Multimedia 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 Gabelli Multimedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and Gabelli Multimedia.
Diversification Opportunities for Gladstone Investment and Gabelli Multimedia
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gladstone and Gabelli is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and The Gabelli Multimedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Gabelli Multimedia 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 Gabelli Multimedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Gabelli Multimedia has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Gabelli Multimedia go up and down completely randomly.
Pair Corralation between Gladstone Investment and Gabelli Multimedia
Assuming the 90 days horizon Gladstone Investment is expected to generate 0.62 times more return on investment than Gabelli Multimedia. However, Gladstone Investment is 1.61 times less risky than Gabelli Multimedia. It trades about 0.05 of its potential returns per unit of risk. The Gabelli Multimedia is currently generating about -0.11 per unit of risk. If you would invest 2,450 in Gladstone Investment on August 31, 2024 and sell it today you would earn a total of 7.00 from holding Gladstone Investment or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. The Gabelli Multimedia
Performance |
| Timeline |
| Gladstone Investment |
| The Gabelli Multimedia |
Gladstone Investment and Gabelli Multimedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and Gabelli Multimedia
The main advantage of trading using opposite Gladstone Investment and Gabelli Multimedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, Gabelli Multimedia 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 Gabelli Multimedia will offset losses from the drop in Gabelli Multimedia's long position.| Gladstone Investment vs. Newtek Business Services | Gladstone Investment vs. Oxford Lane Capital | Gladstone Investment vs. Gladstone Investment | Gladstone Investment vs. Gladstone Commercial Corp |
| Gabelli Multimedia vs. Virtus AllianzGI Convertible | Gabelli Multimedia vs. The Gabelli Equity | Gabelli Multimedia vs. Oxford Lane Capital | Gabelli Multimedia vs. The Gabelli Utility |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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