Correlation Between Gladstone Commercial and FAST RETAIL
Can any of the company-specific risk be diversified away by investing in both Gladstone Commercial and FAST RETAIL 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 FAST RETAIL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Commercial and FAST RETAIL ADR, you can compare the effects of market volatilities on Gladstone Commercial and FAST RETAIL 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 FAST RETAIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Commercial and FAST RETAIL.
Diversification Opportunities for Gladstone Commercial and FAST RETAIL
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gladstone and FAST is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Commercial and FAST RETAIL ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAST RETAIL ADR 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 FAST RETAIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAST RETAIL ADR has no effect on the direction of Gladstone Commercial i.e., Gladstone Commercial and FAST RETAIL go up and down completely randomly.
Pair Corralation between Gladstone Commercial and FAST RETAIL
Assuming the 90 days horizon Gladstone Commercial is expected to generate 2.67 times less return on investment than FAST RETAIL. In addition to that, Gladstone Commercial is 1.2 times more volatile than FAST RETAIL ADR. It trades about 0.02 of its total potential returns per unit of risk. FAST RETAIL ADR is currently generating about 0.06 per unit of volatility. If you would invest 1,895 in FAST RETAIL ADR on September 4, 2024 and sell it today you would earn a total of 1,265 from holding FAST RETAIL ADR or generate 66.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Gladstone Commercial vs. FAST RETAIL ADR
Performance |
| Timeline |
| Gladstone Commercial |
| FAST RETAIL ADR |
Gladstone Commercial and FAST RETAIL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Commercial and FAST RETAIL
The main advantage of trading using opposite Gladstone Commercial and FAST RETAIL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Commercial position performs unexpectedly, FAST RETAIL 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 FAST RETAIL will offset losses from the drop in FAST RETAIL's long position.| Gladstone Commercial vs. PARKEN Sport Entertainment | Gladstone Commercial vs. ANTA SPORTS PRODUCT | Gladstone Commercial vs. Gaztransport Technigaz SA | Gladstone Commercial vs. SPORT LISBOA E |
| FAST RETAIL vs. FAST RETAILCOSPHDR 1 | FAST RETAIL vs. Ross Stores | FAST RETAIL vs. Genesco | FAST RETAIL vs. Stitch Fix |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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