Correlation Between Gladstone Investment and CEZ A

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

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

Diversification Opportunities for Gladstone Investment and CEZ A

-0.01

Correlation Coefficient

Gladstone Investment  CEZ A

Good diversification

The 3 months correlation between Gladstone and CEZ is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and CEZ a s in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEZ a s 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 CEZ A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEZ a s has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and CEZ A go up and down completely randomly.

Pair Corralation between Gladstone Investment and CEZ A

Assuming the 90 days horizon Gladstone Investment is expected to under-perform the CEZ A. In addition to that, Gladstone Investment is 1.25 times more volatile than CEZ a s. It trades about -0.01 of its total potential returns per unit of risk. CEZ a s is currently generating about 0.19 per unit of volatility. If you would invest  3,596  in CEZ a s on October 26, 2024 and sell it today you would earn a total of  560.00  from holding CEZ a s or generate 15.57% return on investment over 90 days.

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

Gladstone Investment  vs.  CEZ a s

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 newest stock price disturbance, may contribute to mid-run losses for the stockholders.

CEZ a s

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in CEZ a s are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, CEZ A reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gladstone Investment and CEZ A

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

The idea behind Gladstone Investment and CEZ a s 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..