Correlation Between Gladstone Commercial and PS Business
Can any of the company-specific risk be diversified away by investing in both Gladstone Commercial and PS Business 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 PS Business 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 PS Business Parks, you can compare the effects of market volatilities on Gladstone Commercial and PS Business 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 PS Business. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Commercial and PS Business.
Diversification Opportunities for Gladstone Commercial and PS Business
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gladstone and PSBZP is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Commercial Corp and PS Business Parks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PS Business Parks 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 PS Business. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PS Business Parks has no effect on the direction of Gladstone Commercial i.e., Gladstone Commercial and PS Business go up and down completely randomly.
Pair Corralation between Gladstone Commercial and PS Business
Assuming the 90 days horizon Gladstone Commercial is expected to generate 4.81 times less return on investment than PS Business. But when comparing it to its historical volatility, Gladstone Commercial Corp is 2.31 times less risky than PS Business. It trades about 0.03 of its potential returns per unit of risk. PS Business Parks is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,101 in PS Business Parks on October 9, 2024 and sell it today you would earn a total of 234.00 from holding PS Business Parks or generate 21.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 26.06% |
| Values | Daily Returns |
Gladstone Commercial Corp vs. PS Business Parks
Performance |
| Timeline |
| Gladstone Commercial Corp |
| PS Business Parks |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Gladstone Commercial and PS Business Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Commercial and PS Business
The main advantage of trading using opposite Gladstone Commercial and PS Business positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Commercial position performs unexpectedly, PS Business 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 PS Business will offset losses from the drop in PS Business' 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 |
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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 Valuation module to check real value of public entities based on technical and fundamental data.
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