Correlation Between Gladstone Investment and MSCI

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

By analyzing existing cross correlation between Gladstone Investment and MSCI Inc, you can compare the effects of market volatilities on Gladstone Investment and MSCI 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 MSCI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and MSCI.

Diversification Opportunities for Gladstone Investment and MSCI

0.57

Correlation Coefficient

Gladstone Investment  MSCI

Very weak diversification

The 3 months correlation between Gladstone and MSCI is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and MSCI Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MSCI Inc 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 MSCI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MSCI Inc has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and MSCI go up and down completely randomly.

Pair Corralation between Gladstone Investment and MSCI

Assuming the 90 days horizon Gladstone Investment is expected to generate 1.26 times more return on investment than MSCI. However, Gladstone Investment is 1.26 times more volatile than MSCI Inc. It trades about 0.08 of its potential returns per unit of risk. MSCI Inc is currently generating about 0.07 per unit of risk. If you would invest  1,203  in Gladstone Investment on October 9, 2024 and sell it today you would earn a total of  89.00  from holding Gladstone Investment or generate 7.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Gladstone Investment  vs.  MSCI Inc

Gladstone Investment

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Investment are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Gladstone Investment may actually be approaching a critical reversion point that can send shares even higher in February 2025.

MSCI Inc

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MSCI Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, MSCI is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Gladstone Investment and MSCI

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

The idea behind Gladstone Investment and MSCI Inc 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.