Correlation Between Gladstone Investment and State Street
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and State Street 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 State Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and State Street, you can compare the effects of market volatilities on Gladstone Investment and State Street 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 State Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and State Street.
Diversification Opportunities for Gladstone Investment and State Street
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gladstone and State is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and State Street in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Street 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 State Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Street has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and State Street go up and down completely randomly.
Pair Corralation between Gladstone Investment and State Street
Assuming the 90 days horizon Gladstone Investment is expected to generate 0.78 times more return on investment than State Street. However, Gladstone Investment is 1.29 times less risky than State Street. It trades about 0.03 of its potential returns per unit of risk. State Street is currently generating about -0.09 per unit of risk. If you would invest 2,451 in Gladstone Investment on August 27, 2024 and sell it today you would earn a total of 4.00 from holding Gladstone Investment or generate 0.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. State Street
Performance |
| Timeline |
| Gladstone Investment |
| State Street |
Gladstone Investment and State Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and State Street
The main advantage of trading using opposite Gladstone Investment and State Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, State Street 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 State Street will offset losses from the drop in State Street'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 |
| State Street vs. The Gabelli Equity | State Street vs. The Gabelli Multimedia | State Street vs. The Gabelli Equity | State Street vs. Virtus AllianzGI Convertible |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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