Correlation Between Heartland Financial and Gladstone Commercial
Can any of the company-specific risk be diversified away by investing in both Heartland Financial and Gladstone Commercial 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 Heartland Financial and Gladstone Commercial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Heartland Financial USA and Gladstone Commercial Corp, you can compare the effects of market volatilities on Heartland Financial and Gladstone Commercial 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 Heartland Financial with a short position of Gladstone Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Heartland Financial and Gladstone Commercial.
Diversification Opportunities for Heartland Financial and Gladstone Commercial
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Heartland and Gladstone is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Heartland Financial USA and Gladstone Commercial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Commercial Corp and Heartland Financial 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 Heartland Financial USA are associated (or correlated) with Gladstone Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Commercial Corp has no effect on the direction of Heartland Financial i.e., Heartland Financial and Gladstone Commercial go up and down completely randomly.
Pair Corralation between Heartland Financial and Gladstone Commercial
Assuming the 90 days horizon Heartland Financial is expected to generate 5.95 times less return on investment than Gladstone Commercial. But when comparing it to its historical volatility, Heartland Financial USA is 1.81 times less risky than Gladstone Commercial. It trades about 0.08 of its potential returns per unit of risk. Gladstone Commercial Corp is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 2,188 in Gladstone Commercial Corp on October 20, 2024 and sell it today you would earn a total of 108.00 from holding Gladstone Commercial Corp or generate 4.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Heartland Financial USA vs. Gladstone Commercial Corp
Performance |
| Timeline |
| Heartland Financial USA |
| Gladstone Commercial Corp |
Heartland Financial and Gladstone Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Heartland Financial and Gladstone Commercial
The main advantage of trading using opposite Heartland Financial and Gladstone Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Heartland Financial position performs unexpectedly, Gladstone Commercial 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 Gladstone Commercial will offset losses from the drop in Gladstone Commercial's long position.| Heartland Financial vs. Wintrust Financial Corp | Heartland Financial vs. Pinnacle Financial Partners | Heartland Financial vs. WesBanco | Heartland Financial vs. OceanFirst Financial Corp |
| Gladstone Commercial vs. Gladstone Commercial Corp | Gladstone Commercial vs. AGNC Investment Corp | Gladstone Commercial vs. AGNC Investment Corp | Gladstone Commercial vs. AGNC Investment Corp |
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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