Correlation Between REGAL ASIAN and Gladstone Investment

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

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

Diversification Opportunities for REGAL ASIAN and Gladstone Investment

-0.04

Correlation Coefficient

REGAL ASIAN  Gladstone Investment

Good diversification

The 3 months correlation between REGAL and Gladstone is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding REGAL ASIAN INVESTMENTS and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and REGAL ASIAN 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 REGAL ASIAN INVESTMENTS are associated (or correlated) with Gladstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Investment has no effect on the direction of REGAL ASIAN i.e., REGAL ASIAN and Gladstone Investment go up and down completely randomly.

Pair Corralation between REGAL ASIAN and Gladstone Investment

Assuming the 90 days trading horizon REGAL ASIAN INVESTMENTS is expected to under-perform the Gladstone Investment. In addition to that, REGAL ASIAN is 1.02 times more volatile than Gladstone Investment. It trades about -0.13 of its total potential returns per unit of risk. Gladstone Investment is currently generating about -0.03 per unit of volatility. If you would invest  1,305  in Gladstone Investment on October 20, 2024 and sell it today you would lose (45.00) from holding Gladstone Investment or give up 3.45% of portfolio value over 90 days.

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

REGAL ASIAN INVESTMENTS  vs.  Gladstone Investment

REGAL ASIAN INVESTMENTS

Risk-Adjusted Performance

0 of 100

Very Weak

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

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 latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with REGAL ASIAN and Gladstone Investment

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

The idea behind REGAL ASIAN INVESTMENTS and Gladstone Investment 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.