Correlation Between Gladstone Investment and Blackstone

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

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

Diversification Opportunities for Gladstone Investment and Blackstone

-0.4

Correlation Coefficient

Gladstone Investment  Blackstone

Very good diversification

The 3 months correlation between Gladstone and Blackstone is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Blackstone Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackstone Group 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 Blackstone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackstone Group has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Blackstone go up and down completely randomly.

Pair Corralation between Gladstone Investment and Blackstone

Assuming the 90 days horizon Gladstone Investment is expected to generate 0.66 times more return on investment than Blackstone. However, Gladstone Investment is 1.52 times less risky than Blackstone. It trades about 0.06 of its potential returns per unit of risk. Blackstone Group is currently generating about -0.09 per unit of risk. If you would invest  1,265  in Gladstone Investment on December 4, 2024 and sell it today you would earn a total of  63.00  from holding Gladstone Investment or generate 4.98% return on investment over 90 days.

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

Gladstone Investment  vs.  Blackstone Group

Gladstone Investment

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Investment are ranked lower than 5 (%) 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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Blackstone Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Blackstone Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Gladstone Investment and Blackstone

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

The idea behind Gladstone Investment and Blackstone Group 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.