Correlation Between Gladstone Investment and Prestige Wealth

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

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

Diversification Opportunities for Gladstone Investment and Prestige Wealth

-0.82

Correlation Coefficient

Gladstone Investment  Prestige Wealth

Pay attention - limited upside

The 3 months correlation between Gladstone and Prestige is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Prestige Wealth Ordinary in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prestige Wealth Ordinary 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 Prestige Wealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prestige Wealth Ordinary has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Prestige Wealth go up and down completely randomly.

Pair Corralation between Gladstone Investment and Prestige Wealth

Assuming the 90 days horizon Gladstone Investment is expected to generate 0.03 times more return on investment than Prestige Wealth. However, Gladstone Investment is 31.52 times less risky than Prestige Wealth. It trades about 0.11 of its potential returns per unit of risk. Prestige Wealth Ordinary is currently generating about -0.06 per unit of risk. If you would invest  2,432  in Gladstone Investment on December 21, 2024 and sell it today you would earn a total of  61.00  from holding Gladstone Investment or generate 2.51% return on investment over 90 days.

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

Gladstone Investment  vs.  Prestige Wealth Ordinary

Gladstone Investment

Risk-Adjusted Performance

OK

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.

Prestige Wealth Ordinary

Risk-Adjusted Performance

Very Weak

Over the last 90 days Prestige Wealth Ordinary has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Gladstone Investment and Prestige Wealth

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

The idea behind Gladstone Investment and Prestige Wealth Ordinary 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 Transaction History module to view history of all your transactions and understand their impact on performance.