Correlation Between Gladstone Commercial and Real Estate
Can any of the company-specific risk be diversified away by investing in both Gladstone Commercial and Real Estate 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 Real Estate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Commercial and The Real Estate, you can compare the effects of market volatilities on Gladstone Commercial and Real Estate 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 Real Estate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Commercial and Real Estate.
Diversification Opportunities for Gladstone Commercial and Real Estate
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Gladstone and Real is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Commercial and The Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Real Estate 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 Real Estate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Real Estate has no effect on the direction of Gladstone Commercial i.e., Gladstone Commercial and Real Estate go up and down completely randomly.
Pair Corralation between Gladstone Commercial and Real Estate
Given the investment horizon of 90 days Gladstone Commercial is expected to generate 1.51 times less return on investment than Real Estate. In addition to that, Gladstone Commercial is 1.5 times more volatile than The Real Estate. It trades about 0.02 of its total potential returns per unit of risk. The Real Estate is currently generating about 0.04 per unit of volatility. If you would invest 3,632 in The Real Estate on August 23, 2024 and sell it today you would earn a total of 744.00 from holding The Real Estate or generate 20.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Commercial vs. The Real Estate
Performance |
| Timeline |
| Gladstone Commercial |
| Real Estate |
Gladstone Commercial and Real Estate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Commercial and Real Estate
The main advantage of trading using opposite Gladstone Commercial and Real Estate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Commercial position performs unexpectedly, Real Estate 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 Real Estate will offset losses from the drop in Real Estate's long position.| Gladstone Commercial vs. Gladstone Investment | Gladstone Commercial vs. Gladstone Capital | Gladstone Commercial vs. LTC Properties | Gladstone Commercial vs. Dynex Capital |
| Real Estate vs. Gladstone Commercial | Real Estate vs. W P Carey | Real Estate vs. Peakstone Realty Trust | Real Estate vs. CTO Realty Growth |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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