Correlation Between Gentex and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both Gentex and Gladstone Investment 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 Gentex and Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gentex and Gladstone Investment, you can compare the effects of market volatilities on Gentex and Gladstone Investment 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 Gentex with a short position of Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gentex and Gladstone Investment.
Diversification Opportunities for Gentex and Gladstone Investment
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gentex and Gladstone is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Gentex and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and Gentex 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 Gentex are associated (or correlated) with Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of Gentex i.e., Gentex and Gladstone Investment go up and down completely randomly.
Pair Corralation between Gentex and Gladstone Investment
Assuming the 90 days horizon Gentex is expected to under-perform the Gladstone Investment. But the stock apears to be less risky and, when comparing its historical volatility, Gentex is 1.92 times less risky than Gladstone Investment. The stock trades about -0.64 of its potential returns per unit of risk. The Gladstone Investment is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 1,293 in Gladstone Investment on October 12, 2024 and sell it today you would lose (36.00) from holding Gladstone Investment or give up 2.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Gentex vs. Gladstone Investment
Performance |
| Timeline |
| Gentex |
| Gladstone Investment |
Gentex and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gentex and Gladstone Investment
The main advantage of trading using opposite Gentex and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gentex position performs unexpectedly, Gladstone Investment 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 Gladstone Investment will offset losses from the drop in Gladstone Investment's long position.| Gentex vs. Gladstone Investment | Gentex vs. Air Transport Services | Gentex vs. ECHO INVESTMENT ZY | Gentex vs. BROADWIND ENRGY |
| Gladstone Investment vs. Nufarm Limited | Gladstone Investment vs. Daito Trust Construction | Gladstone Investment vs. Hanison Construction Holdings | Gladstone Investment vs. AGRICULTBK HADR25 YC |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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