Correlation Between Gladstone Commercial and China Resources
Can any of the company-specific risk be diversified away by investing in both Gladstone Commercial and China Resources 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 China Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Commercial Corp and China Resources Beer, you can compare the effects of market volatilities on Gladstone Commercial and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Commercial and China Resources.
Diversification Opportunities for Gladstone Commercial and China Resources
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gladstone and China is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Commercial Corp and China Resources Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Beer 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 Corp are associated (or correlated) with China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Beer has no effect on the direction of Gladstone Commercial i.e., Gladstone Commercial and China Resources go up and down completely randomly.
Pair Corralation between Gladstone Commercial and China Resources
Assuming the 90 days horizon Gladstone Commercial Corp is expected to generate 0.33 times more return on investment than China Resources. However, Gladstone Commercial Corp is 3.07 times less risky than China Resources. It trades about 0.08 of its potential returns per unit of risk. China Resources Beer is currently generating about -0.07 per unit of risk. If you would invest 2,005 in Gladstone Commercial Corp on September 3, 2024 and sell it today you would earn a total of 411.00 from holding Gladstone Commercial Corp or generate 20.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.56% |
| Values | Daily Returns |
Gladstone Commercial Corp vs. China Resources Beer
Performance |
| Timeline |
| Gladstone Commercial Corp |
| China Resources Beer |
Gladstone Commercial and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Commercial and China Resources
The main advantage of trading using opposite Gladstone Commercial and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Commercial position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| Gladstone Commercial vs. Gladstone Commercial Corp | Gladstone Commercial vs. AGNC Investment Corp | Gladstone Commercial vs. AGNC Investment Corp | Gladstone Commercial vs. AGNC Investment Corp |
| China Resources vs. Tsingtao Brewery Co | China Resources vs. Budweiser Brewing | China Resources vs. Boston Beer | China Resources vs. Anheuser Busch Inbev |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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