Correlation Between Gladstone Commercial and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both Gladstone Commercial and PARKEN Sport 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 PARKEN Sport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Commercial and PARKEN Sport Entertainment, you can compare the effects of market volatilities on Gladstone Commercial and PARKEN Sport 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 PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Commercial and PARKEN Sport.
Diversification Opportunities for Gladstone Commercial and PARKEN Sport
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gladstone and PARKEN is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Commercial and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta 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 PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of Gladstone Commercial i.e., Gladstone Commercial and PARKEN Sport go up and down completely randomly.
Pair Corralation between Gladstone Commercial and PARKEN Sport
Assuming the 90 days horizon Gladstone Commercial is expected to under-perform the PARKEN Sport. But the stock apears to be less risky and, when comparing its historical volatility, Gladstone Commercial is 1.78 times less risky than PARKEN Sport. The stock trades about -0.01 of its potential returns per unit of risk. The PARKEN Sport Entertainment is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,630 in PARKEN Sport Entertainment on September 12, 2024 and sell it today you would earn a total of 50.00 from holding PARKEN Sport Entertainment or generate 3.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Gladstone Commercial vs. PARKEN Sport Entertainment
Performance |
| Timeline |
| Gladstone Commercial |
| PARKEN Sport Enterta |
Gladstone Commercial and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Commercial and PARKEN Sport
The main advantage of trading using opposite Gladstone Commercial and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Commercial position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport's long position.| Gladstone Commercial vs. Gaztransport Technigaz SA | Gladstone Commercial vs. GigaMedia | Gladstone Commercial vs. Texas Roadhouse | Gladstone Commercial vs. Sportsmans Warehouse Holdings |
| PARKEN Sport vs. The Walt Disney | PARKEN Sport vs. Charter Communications | PARKEN Sport vs. Warner Music Group | PARKEN Sport vs. Superior Plus Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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