Correlation Between Gladstone Investment and Conduit Pharmaceuticals

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

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

Diversification Opportunities for Gladstone Investment and Conduit Pharmaceuticals

-0.45

Correlation Coefficient

Gladstone Investment  Conduit Pharmaceuticals

Very good diversification

The 3 months correlation between Gladstone and Conduit is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Conduit Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Conduit Pharmaceuticals 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 Conduit Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Conduit Pharmaceuticals has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Conduit Pharmaceuticals go up and down completely randomly.

Pair Corralation between Gladstone Investment and Conduit Pharmaceuticals

Assuming the 90 days horizon Gladstone Investment is expected to generate 0.04 times more return on investment than Conduit Pharmaceuticals. However, Gladstone Investment is 22.5 times less risky than Conduit Pharmaceuticals. It trades about 0.09 of its potential returns per unit of risk. Conduit Pharmaceuticals is currently generating about -0.18 per unit of risk. If you would invest  2,292  in Gladstone Investment on October 25, 2024 and sell it today you would earn a total of  165.00  from holding Gladstone Investment or generate 7.2% return on investment over 90 days.

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

Gladstone Investment  vs.  Conduit Pharmaceuticals

Gladstone Investment

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Investment are ranked lower than 8 (%) 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.

Conduit Pharmaceuticals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Conduit Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's fundamental indicators remain comparatively stable which may send shares a bit higher in February 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 Conduit Pharmaceuticals

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

The idea behind Gladstone Investment and Conduit Pharmaceuticals 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.