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
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gladstone and Global is -0.12. 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 under-perform the Global Net. But the preferred stock apears to be less risky and, when comparing its historical volatility, Gladstone Commercial Corp is 2.38 times less risky than Global Net. The preferred stock trades about -0.2 of its potential returns per unit of risk. The Global Net Lease is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 2,235 in Global Net Lease on August 30, 2024 and sell it today you would lose (20.00) from holding Global Net Lease or give up 0.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| 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. Popular Capital Trust | Gladstone Commercial vs. Oxford Lane Capital | Gladstone Commercial vs. Hovnanian Enterprises PFD |
| Global Net vs. Global Net Lease | Global Net vs. Global Medical REIT | Global Net vs. City Office REIT | Global Net vs. ARMOUR Residential REIT |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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