Correlation Between NYSE Composite and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Gladstone Investment, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Gladstone Investment.
Diversification Opportunities for NYSE Composite and Gladstone Investment
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NYSE and Gladstone is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Gladstone Investment go up and down completely randomly.
Pair Corralation between NYSE Composite and Gladstone Investment
Assuming the 90 days trading horizon NYSE Composite is expected to generate 1.26 times less return on investment than Gladstone Investment. But when comparing it to its historical volatility, NYSE Composite is 1.71 times less risky than Gladstone Investment. It trades about 0.08 of its potential returns per unit of risk. Gladstone Investment is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 993.00 in Gladstone Investment on September 2, 2024 and sell it today you would earn a total of 373.00 from holding Gladstone Investment or generate 37.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Gladstone Investment
Performance |
| Timeline |
NYSE Composite and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Gladstone Investment
Pair trading matchups for Gladstone Investment
Pair Trading with NYSE Composite and Gladstone Investment
The main advantage of trading using opposite NYSE Composite and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Gladstone Investment vs. PennantPark Floating Rate | Gladstone Investment vs. Horizon Technology Finance | Gladstone Investment vs. Stellus Capital Investment | Gladstone Investment vs. Prospect Capital |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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