Correlation Between Teledyne Technologies and Gladstone Investment
Can any of the company-specific risk be diversified away by investing in both Teledyne Technologies 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 Teledyne Technologies and Gladstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Teledyne Technologies Incorporated and Gladstone Investment, you can compare the effects of market volatilities on Teledyne Technologies 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 Teledyne Technologies with a short position of Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Teledyne Technologies and Gladstone Investment.
Diversification Opportunities for Teledyne Technologies and Gladstone Investment
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Teledyne and Gladstone is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Teledyne Technologies Incorpor and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and Teledyne Technologies 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 Teledyne Technologies Incorporated 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 Teledyne Technologies i.e., Teledyne Technologies and Gladstone Investment go up and down completely randomly.
Pair Corralation between Teledyne Technologies and Gladstone Investment
Assuming the 90 days horizon Teledyne Technologies Incorporated is expected to under-perform the Gladstone Investment. But the stock apears to be less risky and, when comparing its historical volatility, Teledyne Technologies Incorporated is 1.42 times less risky than Gladstone Investment. The stock trades about -0.09 of its potential returns per unit of risk. The Gladstone Investment is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,268 in Gladstone Investment on September 12, 2024 and sell it today you would earn a total of 18.00 from holding Gladstone Investment or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Teledyne Technologies Incorpor vs. Gladstone Investment
Performance |
| Timeline |
| Teledyne Technologies |
| Gladstone Investment |
Teledyne Technologies and Gladstone Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Teledyne Technologies and Gladstone Investment
The main advantage of trading using opposite Teledyne Technologies and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Teledyne Technologies 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.| Teledyne Technologies vs. HEXAGON AB ADR1 | Teledyne Technologies vs. Superior Plus Corp | Teledyne Technologies vs. SIVERS SEMICONDUCTORS AB | Teledyne Technologies vs. NorAm Drilling AS |
| Gladstone Investment vs. Lyxor 1 | Gladstone Investment vs. Xtrackers ShortDAX | Gladstone Investment vs. Xtrackers LevDAX |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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