Correlation Between Gladstone Investment and Consolidated Communications

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

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

Diversification Opportunities for Gladstone Investment and Consolidated Communications

-0.09

Correlation Coefficient

Gladstone Investment  Consolidated Communications

Good diversification

The 3 months correlation between Gladstone and Consolidated is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Consolidated Communications Ho in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consolidated Communications 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 Consolidated Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consolidated Communications has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Consolidated Communications go up and down completely randomly.

Pair Corralation between Gladstone Investment and Consolidated Communications

Assuming the 90 days horizon Gladstone Investment is expected to generate 33.0 times less return on investment than Consolidated Communications. In addition to that, Gladstone Investment is 2.15 times more volatile than Consolidated Communications Holdings. It trades about 0.0 of its total potential returns per unit of risk. Consolidated Communications Holdings is currently generating about 0.13 per unit of volatility. If you would invest  428.00  in Consolidated Communications Holdings on October 24, 2024 and sell it today you would earn a total of  20.00  from holding Consolidated Communications Holdings or generate 4.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	77.97%
Values	Daily Returns

Gladstone Investment  vs.  Consolidated Communications Ho

Gladstone Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gladstone Investment has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Consolidated Communications

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Consolidated Communications Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, Consolidated Communications may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Gladstone Investment and Consolidated Communications

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

The idea behind Gladstone Investment and Consolidated Communications Holdings 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.