Correlation Between Gladstone Investment and TOTAL BANGUN

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

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

Diversification Opportunities for Gladstone Investment and TOTAL BANGUN

-0.07

Correlation Coefficient

Gladstone Investment  TOTAL BANGUN

Good diversification

The 3 months correlation between Gladstone and TOTAL is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and TOTAL BANGUN PERSAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOTAL BANGUN PERSAD 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 TOTAL BANGUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOTAL BANGUN PERSAD has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and TOTAL BANGUN go up and down completely randomly.

Pair Corralation between Gladstone Investment and TOTAL BANGUN

Assuming the 90 days horizon Gladstone Investment is expected to generate 0.23 times more return on investment than TOTAL BANGUN. However, Gladstone Investment is 4.27 times less risky than TOTAL BANGUN. It trades about -0.01 of its potential returns per unit of risk. TOTAL BANGUN PERSAD is currently generating about -0.06 per unit of risk. If you would invest  1,267  in Gladstone Investment on December 23, 2024 and sell it today you would lose (19.00) from holding Gladstone Investment or give up 1.5% of portfolio value over 90 days.

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

Gladstone Investment  vs.  TOTAL BANGUN PERSAD

Gladstone Investment

Risk-Adjusted Performance

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.

TOTAL BANGUN PERSAD

Risk-Adjusted Performance

Very Weak

Over the last 90 days TOTAL BANGUN PERSAD has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Gladstone Investment and TOTAL BANGUN

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

The idea behind Gladstone Investment and TOTAL BANGUN PERSAD 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.