Correlation Between Ellsworth Growth and Gladstone Investment

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

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

Diversification Opportunities for Ellsworth Growth and Gladstone Investment

0.72

Correlation Coefficient

Ellsworth Growth  Gladstone Investment

Poor diversification

The 3 months correlation between Ellsworth and Gladstone is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Ellsworth Growth and and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and Ellsworth Growth 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 Ellsworth Growth and 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 Ellsworth Growth i.e., Ellsworth Growth and Gladstone Investment go up and down completely randomly.

Pair Corralation between Ellsworth Growth and Gladstone Investment

Assuming the 90 days trading horizon Ellsworth Growth and is expected to generate 1.88 times more return on investment than Gladstone Investment. However, Ellsworth Growth is 1.88 times more volatile than Gladstone Investment. It trades about 0.13 of its potential returns per unit of risk. Gladstone Investment is currently generating about 0.08 per unit of risk. If you would invest  2,253  in Ellsworth Growth and on August 30, 2024 and sell it today you would earn a total of  150.00  from holding Ellsworth Growth and or generate 6.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.44%
Values	Daily Returns

Ellsworth Growth and  vs.  Gladstone Investment

Ellsworth Growth

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ellsworth Growth and are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Ellsworth Growth may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Gladstone Investment

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Investment are ranked lower than 6 (%) 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 Ellsworth Growth and Gladstone Investment

The main advantage of trading using opposite Ellsworth Growth and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ellsworth Growth 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 Ellsworth Growth and 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.