Correlation Between Synchronoss Technologies and Gladstone Investment

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

By analyzing existing cross correlation between Synchronoss Technologies 8375 and Gladstone Investment, you can compare the effects of market volatilities on Synchronoss Technologies 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 Synchronoss Technologies with a short position of Gladstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Synchronoss Technologies and Gladstone Investment.

Diversification Opportunities for Synchronoss Technologies and Gladstone Investment

0.09

Correlation Coefficient

Synchronoss Technologies  Gladstone Investment

Significant diversification

The 3 months correlation between Synchronoss and Gladstone is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Synchronoss Technologies 8375 and Gladstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Investment and Synchronoss Technologies 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 Synchronoss Technologies 8375 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 Synchronoss Technologies i.e., Synchronoss Technologies and Gladstone Investment go up and down completely randomly.

Pair Corralation between Synchronoss Technologies and Gladstone Investment

Assuming the 90 days horizon Synchronoss Technologies 8375 is expected to generate 1.42 times more return on investment than Gladstone Investment. However, Synchronoss Technologies is 1.42 times more volatile than Gladstone Investment. It trades about 0.07 of its potential returns per unit of risk. Gladstone Investment is currently generating about -0.07 per unit of risk. If you would invest  2,428  in Synchronoss Technologies 8375 on September 18, 2024 and sell it today you would earn a total of  54.00  from holding Synchronoss Technologies 8375 or generate 2.22% return on investment over 90 days.

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

Synchronoss Technologies 8375  vs.  Gladstone Investment

Synchronoss Technologies

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Synchronoss Technologies 8375 are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Synchronoss Technologies is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

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.

Pair Trading with Synchronoss Technologies and Gladstone Investment

The main advantage of trading using opposite Synchronoss Technologies and Gladstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Synchronoss Technologies 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 Synchronoss Technologies 8375 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.