Correlation Between First Industrial and Gladstone Commercial
Can any of the company-specific risk be diversified away by investing in both First Industrial 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 First Industrial and Gladstone Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between First Industrial Realty and Gladstone Commercial Corp, you can compare the effects of market volatilities on First Industrial 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 First Industrial with a short position of Gladstone Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of First Industrial and Gladstone Commercial.
Diversification Opportunities for First Industrial and Gladstone Commercial
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between First and Gladstone is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding First Industrial Realty and Gladstone Commercial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Commercial Corp and First Industrial 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 First Industrial Realty 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 Corp has no effect on the direction of First Industrial i.e., First Industrial and Gladstone Commercial go up and down completely randomly.
Pair Corralation between First Industrial and Gladstone Commercial
Allowing for the 90-day total investment horizon First Industrial is expected to generate 1.06 times less return on investment than Gladstone Commercial. In addition to that, First Industrial is 1.69 times more volatile than Gladstone Commercial Corp. It trades about 0.07 of its total potential returns per unit of risk. Gladstone Commercial Corp is currently generating about 0.13 per unit of volatility. If you would invest 1,644 in Gladstone Commercial Corp on September 1, 2024 and sell it today you would earn a total of 513.00 from holding Gladstone Commercial Corp or generate 31.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
First Industrial Realty vs. Gladstone Commercial Corp
Performance |
| Timeline |
| First Industrial Realty |
| Gladstone Commercial Corp |
First Industrial and Gladstone Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with First Industrial and Gladstone Commercial
The main advantage of trading using opposite First Industrial and Gladstone Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if First Industrial 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.| First Industrial vs. LXP Industrial Trust | First Industrial vs. Plymouth Industrial REIT | First Industrial vs. Global Self Storage | First Industrial vs. Terreno Realty |
| Gladstone Commercial vs. Gladstone Commercial Corp | Gladstone Commercial vs. Popular Capital Trust | Gladstone Commercial vs. Oxford Lane Capital | Gladstone Commercial vs. Hovnanian Enterprises PFD |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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