Correlation Between Gladstone Investment and TRADELINK ELECTRON

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

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

Diversification Opportunities for Gladstone Investment and TRADELINK ELECTRON

0.0

Correlation Coefficient

Gladstone Investment  TRADELINK ELECTRON

Pay attention - limited upside

The 3 months correlation between Gladstone and TRADELINK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and TRADELINK ELECTRON in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADELINK ELECTRON 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 TRADELINK ELECTRON. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADELINK ELECTRON has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and TRADELINK ELECTRON go up and down completely randomly.

Pair Corralation between Gladstone Investment and TRADELINK ELECTRON

Assuming the 90 days horizon Gladstone Investment is expected to generate 5.43 times less return on investment than TRADELINK ELECTRON. But when comparing it to its historical volatility, Gladstone Investment is 2.2 times less risky than TRADELINK ELECTRON. It trades about 0.04 of its potential returns per unit of risk. TRADELINK ELECTRON is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  7.45  in TRADELINK ELECTRON on October 4, 2024 and sell it today you would earn a total of  3.55  from holding TRADELINK ELECTRON or generate 47.65% return on investment over 90 days.

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

Gladstone Investment  vs.  TRADELINK ELECTRON

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.

TRADELINK ELECTRON

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TRADELINK ELECTRON has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, TRADELINK ELECTRON is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Gladstone Investment and TRADELINK ELECTRON

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

The idea behind Gladstone Investment and TRADELINK ELECTRON 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.