Correlation Between Gladstone Investment and 718546AK0

Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and 718546AK0 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 718546AK0 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gladstone Investment and PHILLIPS 66 465, you can compare the effects of market volatilities on Gladstone Investment and 718546AK0 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 718546AK0. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and 718546AK0.

Diversification Opportunities for Gladstone Investment and 718546AK0

0.36

Correlation Coefficient

Gladstone Investment  718546AK0

Weak diversification

The 3 months correlation between Gladstone and 718546AK0 is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and PHILLIPS 66 465 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PHILLIPS 66 465 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 718546AK0. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PHILLIPS 66 465 has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and 718546AK0 go up and down completely randomly.

Pair Corralation between Gladstone Investment and 718546AK0

Assuming the 90 days horizon Gladstone Investment is expected to generate 2.25 times less return on investment than 718546AK0. But when comparing it to its historical volatility, Gladstone Investment is 1.92 times less risky than 718546AK0. It trades about 0.1 of its potential returns per unit of risk. PHILLIPS 66 465 is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  9,357  in PHILLIPS 66 465 on December 26, 2024 and sell it today you would earn a total of  495.00  from holding PHILLIPS 66 465 or generate 5.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Gladstone Investment  vs.  PHILLIPS 66 465

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.

PHILLIPS 66 465

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PHILLIPS 66 465 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 718546AK0 is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gladstone Investment and 718546AK0

The main advantage of trading using opposite Gladstone Investment and 718546AK0 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, 718546AK0 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 718546AK0 will offset losses from the drop in 718546AK0's long position.

The idea behind Gladstone Investment and PHILLIPS 66 465 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.