Correlation Between Prestige Wealth and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both Prestige Wealth 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 Prestige Wealth and Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prestige Wealth Ordinary and Gladstone Investment, you can compare the effects of market volatilities on Prestige Wealth 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 Prestige Wealth with a short position of Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prestige Wealth and Gladstone Investment.
Diversification Opportunities for Prestige Wealth and Gladstone Investment
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prestige and Gladstone is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Prestige Wealth Ordinary and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and Prestige Wealth 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 Prestige Wealth Ordinary 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 Prestige Wealth i.e., Prestige Wealth and Gladstone Investment go up and down completely randomly.
Pair Corralation between Prestige Wealth and Gladstone Investment
Considering the 90-day investment horizon Prestige Wealth Ordinary is expected to generate 28.8 times more return on investment than Gladstone Investment. However, Prestige Wealth is 28.8 times more volatile than Gladstone Investment. It trades about 0.1 of its potential returns per unit of risk. Gladstone Investment is currently generating about 0.05 per unit of risk. If you would invest 92.00 in Prestige Wealth Ordinary on August 31, 2024 and sell it today you would earn a total of 11.00 from holding Prestige Wealth Ordinary or generate 11.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prestige Wealth Ordinary vs. Gladstone Investment
Performance |
| Timeline |
| Prestige Wealth Ordinary |
| Gladstone Investment |
Prestige Wealth and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prestige Wealth and Gladstone Investment
The main advantage of trading using opposite Prestige Wealth and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prestige Wealth 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.| Prestige Wealth vs. National Vision Holdings | Prestige Wealth vs. Citizens Bancorp Investment | Prestige Wealth vs. Olympic Steel | Prestige Wealth vs. Inflection Point Acquisition |
| Gladstone Investment vs. Newtek Business Services | Gladstone Investment vs. Oxford Lane Capital | Gladstone Investment vs. Gladstone Investment | Gladstone Investment vs. Gladstone Commercial Corp |
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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