Correlation Between Phenixfin and Gladstone Investment

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

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

Diversification Opportunities for Phenixfin and Gladstone Investment

0.26

Correlation Coefficient

Phenixfin  Gladstone Investment

Modest diversification

The 3 months correlation between Phenixfin and Gladstone is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Phenixfin and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and Phenixfin 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 Phenixfin 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 Phenixfin i.e., Phenixfin and Gladstone Investment go up and down completely randomly.

Pair Corralation between Phenixfin and Gladstone Investment

Considering the 90-day investment horizon Phenixfin is expected to under-perform the Gladstone Investment. In addition to that, Phenixfin is 1.15 times more volatile than Gladstone Investment. It trades about 0.0 of its total potential returns per unit of risk. Gladstone Investment is currently generating about 0.18 per unit of volatility. If you would invest  1,206  in Gladstone Investment on September 13, 2024 and sell it today you would earn a total of  173.00  from holding Gladstone Investment or generate 14.34% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	96.83%
Values	Daily Returns

Phenixfin  vs.  Gladstone Investment

Phenixfin

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Phenixfin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong technical and fundamental indicators, Phenixfin is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Gladstone Investment

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Investment are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain forward indicators, Gladstone Investment displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Phenixfin and Gladstone Investment

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

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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.