Correlation Between Cedar Realty and Gladstone Commercial
Can any of the company-specific risk be diversified away by investing in both Cedar Realty and Gladstone Commercial 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 Cedar Realty and Gladstone Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cedar Realty Trust and Gladstone Commercial, you can compare the effects of market volatilities on Cedar Realty and Gladstone Commercial 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 Cedar Realty with a short position of Gladstone Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cedar Realty and Gladstone Commercial.
Diversification Opportunities for Cedar Realty and Gladstone Commercial
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Cedar and Gladstone is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Cedar Realty Trust and Gladstone Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Commercial and Cedar Realty 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 Cedar Realty Trust are associated (or correlated) with Gladstone Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Commercial has no effect on the direction of Cedar Realty i.e., Cedar Realty and Gladstone Commercial go up and down completely randomly.
Pair Corralation between Cedar Realty and Gladstone Commercial
Assuming the 90 days trading horizon Cedar Realty is expected to generate 5.25 times less return on investment than Gladstone Commercial. In addition to that, Cedar Realty is 1.28 times more volatile than Gladstone Commercial. It trades about 0.02 of its total potential returns per unit of risk. Gladstone Commercial is currently generating about 0.13 per unit of volatility. If you would invest 1,621 in Gladstone Commercial on August 23, 2024 and sell it today you would earn a total of 82.00 from holding Gladstone Commercial or generate 5.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cedar Realty Trust vs. Gladstone Commercial
Performance |
| Timeline |
| Cedar Realty Trust |
| Gladstone Commercial |
Cedar Realty and Gladstone Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cedar Realty and Gladstone Commercial
The main advantage of trading using opposite Cedar Realty and Gladstone Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cedar Realty position performs unexpectedly, Gladstone Commercial 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 Commercial will offset losses from the drop in Gladstone Commercial's long position.| Cedar Realty vs. Saul Centers | Cedar Realty vs. Kimco Realty | Cedar Realty vs. Wheeler Real Estate | Cedar Realty vs. Macerich Company |
| Gladstone Commercial vs. Gladstone Investment | Gladstone Commercial vs. Gladstone Capital | Gladstone Commercial vs. LTC Properties | Gladstone Commercial vs. Dynex Capital |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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