Correlation Between Guangdong Investment and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both Guangdong Investment 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 Guangdong Investment and Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guangdong Investment Limited and Gladstone Investment, you can compare the effects of market volatilities on Guangdong Investment 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 Guangdong Investment with a short position of Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guangdong Investment and Gladstone Investment.
Diversification Opportunities for Guangdong Investment and Gladstone Investment
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Guangdong and Gladstone is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Guangdong Investment Limited and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and Guangdong Investment 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 Guangdong Investment Limited 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 Guangdong Investment i.e., Guangdong Investment and Gladstone Investment go up and down completely randomly.
Pair Corralation between Guangdong Investment and Gladstone Investment
Assuming the 90 days horizon Guangdong Investment Limited is expected to generate 2.96 times more return on investment than Gladstone Investment. However, Guangdong Investment is 2.96 times more volatile than Gladstone Investment. It trades about 0.16 of its potential returns per unit of risk. Gladstone Investment is currently generating about 0.09 per unit of risk. If you would invest 27.00 in Guangdong Investment Limited on November 4, 2024 and sell it today you would earn a total of 42.00 from holding Guangdong Investment Limited or generate 155.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guangdong Investment Limited vs. Gladstone Investment
Performance |
| Timeline |
| Guangdong Investment |
| Gladstone Investment |
Guangdong Investment and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guangdong Investment and Gladstone Investment
The main advantage of trading using opposite Guangdong Investment and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guangdong Investment 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.| Guangdong Investment vs. Hollywood Bowl Group | Guangdong Investment vs. Tencent Music Entertainment | Guangdong Investment vs. PROSIEBENSAT1 MEDIADR4 | Guangdong Investment vs. Benchmark Electronics |
| Gladstone Investment vs. Motorcar Parts of | Gladstone Investment vs. AGNC INVESTMENT | Gladstone Investment vs. Prosiebensat 1 Media | Gladstone Investment vs. TOWNSQUARE MEDIA INC |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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