Correlation Between Gladstone Investment and Harrow Health

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

By analyzing existing cross correlation between Gladstone Investment and Harrow Health 8625, you can compare the effects of market volatilities on Gladstone Investment and Harrow Health 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 Harrow Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and Harrow Health.

Diversification Opportunities for Gladstone Investment and Harrow Health

0.07

Correlation Coefficient

Gladstone Investment  Harrow Health

Significant diversification

The 3 months correlation between Gladstone and Harrow is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and Harrow Health 8625 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Harrow Health 8625 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 Harrow Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Harrow Health 8625 has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and Harrow Health go up and down completely randomly.

Pair Corralation between Gladstone Investment and Harrow Health

Assuming the 90 days horizon Gladstone Investment is expected to generate 1.26 times more return on investment than Harrow Health. However, Gladstone Investment is 1.26 times more volatile than Harrow Health 8625. It trades about 0.17 of its potential returns per unit of risk. Harrow Health 8625 is currently generating about -0.01 per unit of risk. If you would invest  2,440  in Gladstone Investment on September 18, 2024 and sell it today you would earn a total of  18.00  from holding Gladstone Investment or generate 0.74% return on investment over 90 days.

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

Gladstone Investment  vs.  Harrow Health 8625

Gladstone Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gladstone Investment has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Harrow Health 8625

Risk-Adjusted Performance

6 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Harrow Health 8625 are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Harrow Health is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Gladstone Investment and Harrow Health

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

The idea behind Gladstone Investment and Harrow Health 8625 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.