Correlation Between Gladstone Land and Lamar Advertising
Can any of the company-specific risk be diversified away by investing in both Gladstone Land and Lamar Advertising 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 Land and Lamar Advertising into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Land and Lamar Advertising, you can compare the effects of market volatilities on Gladstone Land and Lamar Advertising 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 Land with a short position of Lamar Advertising. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Land and Lamar Advertising.
Diversification Opportunities for Gladstone Land and Lamar Advertising
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Gladstone and Lamar is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Land and Lamar Advertising in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lamar Advertising and Gladstone Land 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 Land are associated (or correlated) with Lamar Advertising. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lamar Advertising has no effect on the direction of Gladstone Land i.e., Gladstone Land and Lamar Advertising go up and down completely randomly.
Pair Corralation between Gladstone Land and Lamar Advertising
Given the investment horizon of 90 days Gladstone Land is expected to under-perform the Lamar Advertising. In addition to that, Gladstone Land is 1.15 times more volatile than Lamar Advertising. It trades about -0.28 of its total potential returns per unit of risk. Lamar Advertising is currently generating about -0.11 per unit of volatility. If you would invest 13,484 in Lamar Advertising on August 27, 2024 and sell it today you would lose (449.00) from holding Lamar Advertising or give up 3.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Land vs. Lamar Advertising
Performance |
| Timeline |
| Gladstone Land |
| Lamar Advertising |
Gladstone Land and Lamar Advertising Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Land and Lamar Advertising
The main advantage of trading using opposite Gladstone Land and Lamar Advertising positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Land position performs unexpectedly, Lamar Advertising 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 Lamar Advertising will offset losses from the drop in Lamar Advertising's long position.| Gladstone Land vs. Farmland Partners | Gladstone Land vs. STAG Industrial | Gladstone Land vs. Gladstone Commercial | Gladstone Land vs. LTC Properties |
| Lamar Advertising vs. Broadstone Net Lease | Lamar Advertising vs. Armada Hflr Pr | Lamar Advertising vs. Brightspire Capital | Lamar Advertising vs. Safehold |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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