Correlation Between Gladstone Commercial and Global Net

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Can any of the company-specific risk be diversified away by investing in both Gladstone Commercial and Global Net 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 Global Net into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Commercial and Global Net Lease,, you can compare the effects of market volatilities on Gladstone Commercial and Global Net 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 Global Net. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Commercial and Global Net.

Diversification Opportunities for Gladstone Commercial and Global Net

GladstoneGlobalDiversified AwayGladstoneGlobalDiversified Away100%
0.03
  Correlation Coefficient

Significant diversification

The 3 months correlation between Gladstone and Global is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Commercial and Global Net Lease, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Net Lease, 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 Global Net. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Net Lease, has no effect on the direction of Gladstone Commercial i.e., Gladstone Commercial and Global Net go up and down completely randomly.

Pair Corralation between Gladstone Commercial and Global Net

Given the investment horizon of 90 days Gladstone Commercial is expected to under-perform the Global Net. But the stock apears to be less risky and, when comparing its historical volatility, Gladstone Commercial is 1.4 times less risky than Global Net. The stock trades about -0.06 of its potential returns per unit of risk. The Global Net Lease, is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  720.00  in Global Net Lease, on November 25, 2024 and sell it today you would earn a total of  5.00  from holding Global Net Lease, or generate 0.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Gladstone Commercial  vs.  Global Net Lease,

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -6-4-20246
JavaScript chart by amCharts 3.21.15GOOD GNL
       Timeline  
Gladstone Commercial 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Gladstone Commercial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb15.51616.51717.5
Global Net Lease, 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Global Net Lease, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Global Net is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb6.86.977.17.27.37.47.5

Gladstone Commercial and Global Net Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.73-1.3-0.87-0.44-0.04330.30.731.161.592.02 0.050.100.150.200.250.300.35
JavaScript chart by amCharts 3.21.15GOOD GNL
       Returns  

Pair Trading with Gladstone Commercial and Global Net

The main advantage of trading using opposite Gladstone Commercial and Global Net positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Commercial position performs unexpectedly, Global Net 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 Global Net will offset losses from the drop in Global Net's long position.
The idea behind Gladstone Commercial and Global Net Lease, pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

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