Correlation Between Atea ASA and Gladstone Investment

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

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

Diversification Opportunities for Atea ASA and Gladstone Investment

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Correlation Coefficient

Atea ASA  Gladstone Investment

Pay attention - limited upside

The 3 months correlation between Atea and Gladstone is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Atea ASA and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and Atea ASA 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 Atea ASA 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 Atea ASA i.e., Atea ASA and Gladstone Investment go up and down completely randomly.

Pair Corralation between Atea ASA and Gladstone Investment

Assuming the 90 days horizon Atea ASA is expected to generate 6.11 times more return on investment than Gladstone Investment. However, Atea ASA is 6.11 times more volatile than Gladstone Investment. It trades about 0.03 of its potential returns per unit of risk. Gladstone Investment is currently generating about 0.08 per unit of risk. If you would invest  1,297  in Atea ASA on October 8, 2024 and sell it today you would earn a total of  105.00  from holding Atea ASA or generate 8.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	79.79%
Values	Daily Returns

Atea ASA  vs.  Gladstone Investment

Atea ASA

Risk-Adjusted Performance

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Very Weak

Over the last 90 days Atea ASA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Atea ASA is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Gladstone Investment

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Investment are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Gladstone Investment is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Atea ASA and Gladstone Investment

The main advantage of trading using opposite Atea ASA and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atea ASA 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 Atea ASA 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.