Correlation Between Gladstone Investment and Anheuser Busch

Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and Anheuser Busch 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 Gladstone Investment and Anheuser Busch into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gladstone Investment and Anheuser Busch InBev SANV, you can compare the effects of market volatilities on Gladstone Investment and Anheuser Busch 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 Gladstone Investment with a short position of Anheuser Busch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and Anheuser Busch.

Diversification Opportunities for Gladstone Investment and Anheuser Busch

-0.14

Correlation Coefficient

Gladstone Investment  Anheuser Busch

Good diversification

The 3 months correlation between Gladstone and Anheuser is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Anheuser Busch InBev SANV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anheuser Busch InBev and Gladstone 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 Gladstone Investment are associated (or correlated) with Anheuser Busch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anheuser Busch InBev has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Anheuser Busch go up and down completely randomly.

Pair Corralation between Gladstone Investment and Anheuser Busch

Assuming the 90 days horizon Gladstone Investment is expected to generate 1.4 times more return on investment than Anheuser Busch. However, Gladstone Investment is 1.4 times more volatile than Anheuser Busch InBev SANV. It trades about 0.02 of its potential returns per unit of risk. Anheuser Busch InBev SANV is currently generating about -0.3 per unit of risk. If you would invest  1,251  in Gladstone Investment on October 12, 2024 and sell it today you would earn a total of  10.00  from holding Gladstone Investment or generate 0.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Gladstone Investment  vs.  Anheuser Busch InBev SANV

Gladstone Investment

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Investment are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Gladstone Investment is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Anheuser Busch InBev

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Anheuser Busch InBev SANV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Gladstone Investment and Anheuser Busch

The main advantage of trading using opposite Gladstone Investment and Anheuser Busch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, Anheuser Busch 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 Anheuser Busch will offset losses from the drop in Anheuser Busch's long position.

The idea behind Gladstone Investment and Anheuser Busch InBev SANV pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.