Correlation Between JLF INVESTMENT and Gladstone Investment

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

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

Diversification Opportunities for JLF INVESTMENT and Gladstone Investment

0.0

Correlation Coefficient

JLF INVESTMENT  Gladstone Investment

Pay attention - limited upside

The 3 months correlation between JLF and Gladstone is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding JLF INVESTMENT and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and JLF 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 JLF INVESTMENT 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 JLF INVESTMENT i.e., JLF INVESTMENT and Gladstone Investment go up and down completely randomly.

Pair Corralation between JLF INVESTMENT and Gladstone Investment

If you would invest  1.00  in JLF INVESTMENT on September 24, 2024 and sell it today you would earn a total of  0.00  from holding JLF INVESTMENT or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

JLF INVESTMENT  vs.  Gladstone Investment

JLF INVESTMENT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JLF INVESTMENT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, JLF INVESTMENT is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Gladstone Investment

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Investment are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Gladstone Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with JLF INVESTMENT and Gladstone Investment

The main advantage of trading using opposite JLF INVESTMENT and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JLF INVESTMENT 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 JLF INVESTMENT 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.

Check out your portfolio center.

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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.