Correlation Between Braemar Hotel and Gladstone Land
Can any of the company-specific risk be diversified away by investing in both Braemar Hotel and Gladstone Land 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 Braemar Hotel and Gladstone Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Braemar Hotel Resorts and Gladstone Land, you can compare the effects of market volatilities on Braemar Hotel and Gladstone Land 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 Braemar Hotel with a short position of Gladstone Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braemar Hotel and Gladstone Land.
Diversification Opportunities for Braemar Hotel and Gladstone Land
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Braemar and Gladstone is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Braemar Hotel Resorts and Gladstone Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Land and Braemar Hotel 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 Braemar Hotel Resorts are associated (or correlated) with Gladstone Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Land has no effect on the direction of Braemar Hotel i.e., Braemar Hotel and Gladstone Land go up and down completely randomly.
Pair Corralation between Braemar Hotel and Gladstone Land
Considering the 90-day investment horizon Braemar Hotel Resorts is expected to generate 2.6 times more return on investment than Gladstone Land. However, Braemar Hotel is 2.6 times more volatile than Gladstone Land. It trades about 0.25 of its potential returns per unit of risk. Gladstone Land is currently generating about -0.28 per unit of risk. If you would invest 292.00 in Braemar Hotel Resorts on August 31, 2024 and sell it today you would earn a total of 68.00 from holding Braemar Hotel Resorts or generate 23.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braemar Hotel Resorts vs. Gladstone Land
Performance |
| Timeline |
| Braemar Hotel Resorts |
| Gladstone Land |
Braemar Hotel and Gladstone Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braemar Hotel and Gladstone Land
The main advantage of trading using opposite Braemar Hotel and Gladstone Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braemar Hotel position performs unexpectedly, Gladstone Land 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 Land will offset losses from the drop in Gladstone Land's long position.| Braemar Hotel vs. Summit Hotel Properties | Braemar Hotel vs. Service Properties Trust | Braemar Hotel vs. InnSuites Hospitality Trust | Braemar Hotel vs. Sotherly Hotels PR |
| Gladstone Land vs. Farmland Partners | Gladstone Land vs. STAG Industrial | Gladstone Land vs. Gladstone Commercial | Gladstone Land vs. LTC Properties |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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