Correlation Between Gladstone Investment and Halliburton

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

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

Diversification Opportunities for Gladstone Investment and Halliburton

-0.28

Correlation Coefficient

Gladstone Investment  Halliburton

Very good diversification

The 3 months correlation between Gladstone and Halliburton is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Halliburton in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halliburton 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 Halliburton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halliburton has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Halliburton go up and down completely randomly.

Pair Corralation between Gladstone Investment and Halliburton

Assuming the 90 days horizon Gladstone Investment is expected to generate 0.65 times more return on investment than Halliburton. However, Gladstone Investment is 1.54 times less risky than Halliburton. It trades about 0.03 of its potential returns per unit of risk. Halliburton is currently generating about -0.14 per unit of risk. If you would invest  1,278  in Gladstone Investment on November 29, 2024 and sell it today you would earn a total of  21.00  from holding Gladstone Investment or generate 1.64% 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.  Halliburton

Gladstone Investment

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Investment are ranked lower than 2 (%) 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.

Halliburton

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Gladstone Investment and Halliburton

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

The idea behind Gladstone Investment and Halliburton 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.