Correlation Between Gladstone Investment and Reitar Logtech

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

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

Diversification Opportunities for Gladstone Investment and Reitar Logtech

-0.58

Correlation Coefficient

Gladstone Investment  Reitar Logtech

Excellent diversification

The 3 months correlation between Gladstone and Reitar is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Reitar Logtech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Reitar Logtech Holdings 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 Reitar Logtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Reitar Logtech Holdings has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Reitar Logtech go up and down completely randomly.

Pair Corralation between Gladstone Investment and Reitar Logtech

Assuming the 90 days horizon Gladstone Investment is expected to generate 2.47 times less return on investment than Reitar Logtech. But when comparing it to its historical volatility, Gladstone Investment is 15.06 times less risky than Reitar Logtech. It trades about 0.13 of its potential returns per unit of risk. Reitar Logtech Holdings is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  391.00  in Reitar Logtech Holdings on October 25, 2024 and sell it today you would lose (2.00) from holding Reitar Logtech Holdings or give up 0.51% of portfolio value over 90 days.

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

Gladstone Investment  vs.  Reitar Logtech Holdings

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.

Reitar Logtech Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Reitar Logtech Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Gladstone Investment and Reitar Logtech

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

The idea behind Gladstone Investment and Reitar Logtech Holdings 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..