Correlation Between Gladstone Commercial and Global Net
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 Corp 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
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gladstone and Global is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Commercial Corp 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 Corp 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
Assuming the 90 days horizon Gladstone Commercial Corp is expected to generate 0.52 times more return on investment than Global Net. However, Gladstone Commercial Corp is 1.94 times less risky than Global Net. It trades about 0.14 of its potential returns per unit of risk. Global Net Lease is currently generating about 0.07 per unit of risk. If you would invest 2,226 in Gladstone Commercial Corp on October 28, 2024 and sell it today you would earn a total of 55.00 from holding Gladstone Commercial Corp or generate 2.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Commercial Corp vs. Global Net Lease
Performance |
| Timeline |
| Gladstone Commercial Corp |
| Global Net Lease |
Gladstone Commercial and Global Net Volatility Contrast
Predicted Return Density |
| 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.| Gladstone Commercial vs. Gladstone Commercial Corp | Gladstone Commercial vs. AGNC Investment Corp | Gladstone Commercial vs. AGNC Investment Corp | Gladstone Commercial vs. AGNC Investment Corp |
| Global Net vs. Modiv Inc | Global Net vs. Precinct Properties New | Global Net vs. Global Net Lease | Global Net vs. NexPoint Diversified Real |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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