Correlation Between Gladstone Investment and PICKN PAY

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

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

Diversification Opportunities for Gladstone Investment and PICKN PAY

0.19

Correlation Coefficient

Gladstone Investment  PICKN PAY

Average diversification

The 3 months correlation between Gladstone and PICKN is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and PICKN PAY STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PICKN PAY STORES 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 PICKN PAY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PICKN PAY STORES has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and PICKN PAY go up and down completely randomly.

Pair Corralation between Gladstone Investment and PICKN PAY

Assuming the 90 days horizon Gladstone Investment is expected to generate 0.47 times more return on investment than PICKN PAY. However, Gladstone Investment is 2.13 times less risky than PICKN PAY. It trades about 0.05 of its potential returns per unit of risk. PICKN PAY STORES is currently generating about -0.02 per unit of risk. If you would invest  897.00  in Gladstone Investment on October 23, 2024 and sell it today you would earn a total of  391.00  from holding Gladstone Investment or generate 43.59% return on investment over 90 days.

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

Gladstone Investment  vs.  PICKN PAY STORES

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.

PICKN PAY STORES

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in PICKN PAY STORES are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, PICKN PAY unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gladstone Investment and PICKN PAY

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

The idea behind Gladstone Investment and PICKN PAY STORES 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.

Check out your portfolio center.

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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.