Correlation Between Gladstone Commercial and Adecco Group
Can any of the company-specific risk be diversified away by investing in both Gladstone Commercial and Adecco Group 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 Adecco Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Commercial and Adecco Group AG, you can compare the effects of market volatilities on Gladstone Commercial and Adecco Group 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 Adecco Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Commercial and Adecco Group.
Diversification Opportunities for Gladstone Commercial and Adecco Group
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gladstone and Adecco is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Commercial and Adecco Group AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adecco Group AG 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 Adecco Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adecco Group AG has no effect on the direction of Gladstone Commercial i.e., Gladstone Commercial and Adecco Group go up and down completely randomly.
Pair Corralation between Gladstone Commercial and Adecco Group
Given the investment horizon of 90 days Gladstone Commercial is expected to under-perform the Adecco Group. But the stock apears to be less risky and, when comparing its historical volatility, Gladstone Commercial is 6.61 times less risky than Adecco Group. The stock trades about -0.23 of its potential returns per unit of risk. The Adecco Group AG is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2,545 in Adecco Group AG on November 27, 2024 and sell it today you would earn a total of 195.00 from holding Adecco Group AG or generate 7.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Commercial vs. Adecco Group AG
Performance |
| Timeline |
| Gladstone Commercial |
| Adecco Group AG |
Gladstone Commercial and Adecco Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Commercial and Adecco Group
The main advantage of trading using opposite Gladstone Commercial and Adecco Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Commercial position performs unexpectedly, Adecco Group 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 Adecco Group will offset losses from the drop in Adecco Group's long position.| Gladstone Commercial vs. Gladstone Investment | Gladstone Commercial vs. Gladstone Capital | Gladstone Commercial vs. LTC Properties | Gladstone Commercial vs. Dynex Capital |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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