Correlation Between Gladstone Investment and LTC Properties
Can any of the company-specific risk be diversified away by investing in both Gladstone Investment and LTC Properties 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 Gladstone Investment and LTC Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Investment and LTC Properties, you can compare the effects of market volatilities on Gladstone Investment and LTC Properties 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 Gladstone Investment with a short position of LTC Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Investment and LTC Properties.
Diversification Opportunities for Gladstone Investment and LTC Properties
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gladstone and LTC is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Investment and LTC Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LTC Properties and Gladstone Investment 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 Gladstone Investment are associated (or correlated) with LTC Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LTC Properties has no effect on the direction of Gladstone Investment i.e., Gladstone Investment and LTC Properties go up and down completely randomly.
Pair Corralation between Gladstone Investment and LTC Properties
Given the investment horizon of 90 days Gladstone Investment is expected to generate 2.06 times less return on investment than LTC Properties. In addition to that, Gladstone Investment is 1.03 times more volatile than LTC Properties. It trades about 0.04 of its total potential returns per unit of risk. LTC Properties is currently generating about 0.09 per unit of volatility. If you would invest 3,052 in LTC Properties on August 26, 2024 and sell it today you would earn a total of 835.00 from holding LTC Properties or generate 27.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Investment vs. LTC Properties
Performance |
| Timeline |
| Gladstone Investment |
| LTC Properties |
Gladstone Investment and LTC Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Investment and LTC Properties
The main advantage of trading using opposite Gladstone Investment and LTC Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Investment position performs unexpectedly, LTC Properties 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 LTC Properties will offset losses from the drop in LTC Properties' long position.| Gladstone Investment vs. PennantPark Floating Rate | Gladstone Investment vs. Horizon Technology Finance | Gladstone Investment vs. Stellus Capital Investment | Gladstone Investment vs. Prospect Capital |
| LTC Properties vs. Medical Properties Trust | LTC Properties vs. Sabra Healthcare REIT | LTC Properties vs. Healthpeak Properties | LTC Properties vs. National Health Investors |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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