Correlation Between Gladstone Commercial and CTO Realty
Can any of the company-specific risk be diversified away by investing in both Gladstone Commercial and CTO Realty 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 Commercial and CTO Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Commercial and CTO Realty Growth, you can compare the effects of market volatilities on Gladstone Commercial and CTO Realty 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 Commercial with a short position of CTO Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Commercial and CTO Realty.
Diversification Opportunities for Gladstone Commercial and CTO Realty
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gladstone and CTO is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Commercial and CTO Realty Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTO Realty Growth and Gladstone Commercial 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 Commercial are associated (or correlated) with CTO Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTO Realty Growth has no effect on the direction of Gladstone Commercial i.e., Gladstone Commercial and CTO Realty go up and down completely randomly.
Pair Corralation between Gladstone Commercial and CTO Realty
Given the investment horizon of 90 days Gladstone Commercial is expected to generate 1.44 times more return on investment than CTO Realty. However, Gladstone Commercial is 1.44 times more volatile than CTO Realty Growth. It trades about 0.12 of its potential returns per unit of risk. CTO Realty Growth is currently generating about 0.03 per unit of risk. If you would invest 1,632 in Gladstone Commercial on August 24, 2024 and sell it today you would earn a total of 71.00 from holding Gladstone Commercial or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Commercial vs. CTO Realty Growth
Performance |
| Timeline |
| Gladstone Commercial |
| CTO Realty Growth |
Gladstone Commercial and CTO Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Commercial and CTO Realty
The main advantage of trading using opposite Gladstone Commercial and CTO Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Commercial position performs unexpectedly, CTO Realty 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 CTO Realty will offset losses from the drop in CTO Realty's long position.| Gladstone Commercial vs. Gladstone Investment | Gladstone Commercial vs. Gladstone Capital | Gladstone Commercial vs. LTC Properties | Gladstone Commercial vs. Dynex Capital |
| CTO Realty vs. Essential Properties Realty | CTO Realty vs. Armada Hflr Pr | CTO Realty vs. Brightspire Capital | CTO Realty vs. Broadstone Net Lease |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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