Correlation Between Gladstone Investment and Paragon GmbH

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

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

Diversification Opportunities for Gladstone Investment and Paragon GmbH

0.15

Correlation Coefficient

Gladstone Investment  Paragon GmbH

Average diversification

The 3 months correlation between Gladstone and Paragon is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and paragon GmbH Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on paragon GmbH 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 Paragon GmbH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of paragon GmbH has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Paragon GmbH go up and down completely randomly.

Pair Corralation between Gladstone Investment and Paragon GmbH

Assuming the 90 days horizon Gladstone Investment is expected to generate 0.36 times more return on investment than Paragon GmbH. However, Gladstone Investment is 2.82 times less risky than Paragon GmbH. It trades about 0.05 of its potential returns per unit of risk. paragon GmbH Co is currently generating about -0.01 per unit of risk. If you would invest  896.00  in Gladstone Investment on October 24, 2024 and sell it today you would earn a total of  384.00  from holding Gladstone Investment or generate 42.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Gladstone Investment  vs.  paragon GmbH Co

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.

paragon GmbH

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in paragon GmbH Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Paragon GmbH reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gladstone Investment and Paragon GmbH

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

The idea behind Gladstone Investment and paragon GmbH Co 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.