Correlation Between Gladstone Commercial and Fanhua
Can any of the company-specific risk be diversified away by investing in both Gladstone Commercial and Fanhua 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 Commercial and Fanhua into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Commercial and Fanhua Inc, you can compare the effects of market volatilities on Gladstone Commercial and Fanhua 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 Commercial with a short position of Fanhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Commercial and Fanhua.
Diversification Opportunities for Gladstone Commercial and Fanhua
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gladstone and Fanhua is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Commercial and Fanhua Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fanhua Inc and Gladstone Commercial 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 Commercial are associated (or correlated) with Fanhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fanhua Inc has no effect on the direction of Gladstone Commercial i.e., Gladstone Commercial and Fanhua go up and down completely randomly.
Pair Corralation between Gladstone Commercial and Fanhua
Assuming the 90 days horizon Gladstone Commercial is expected to generate 0.2 times more return on investment than Fanhua. However, Gladstone Commercial is 4.89 times less risky than Fanhua. It trades about -0.15 of its potential returns per unit of risk. Fanhua Inc is currently generating about -0.37 per unit of risk. If you would invest 1,597 in Gladstone Commercial on October 12, 2024 and sell it today you would lose (53.00) from holding Gladstone Commercial or give up 3.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Commercial vs. Fanhua Inc
Performance |
| Timeline |
| Gladstone Commercial |
| Fanhua Inc |
Gladstone Commercial and Fanhua Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Commercial and Fanhua
The main advantage of trading using opposite Gladstone Commercial and Fanhua positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Commercial position performs unexpectedly, Fanhua 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 Fanhua will offset losses from the drop in Fanhua's long position.| Gladstone Commercial vs. Harmony Gold Mining | Gladstone Commercial vs. Calibre Mining Corp | Gladstone Commercial vs. SPORT LISBOA E | Gladstone Commercial vs. BII Railway Transportation |
| Fanhua vs. Q2M Managementberatung AG | Fanhua vs. CeoTronics AG | Fanhua vs. Ares Management Corp | Fanhua vs. VITEC SOFTWARE GROUP |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Commodity Directory Find actively traded commodities issued by global exchanges |