Correlation Between Gladstone Land and SBA Communications
Can any of the company-specific risk be diversified away by investing in both Gladstone Land and SBA Communications 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 SBA Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Land and SBA Communications Corp, you can compare the effects of market volatilities on Gladstone Land and SBA Communications 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 SBA Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Land and SBA Communications.
Diversification Opportunities for Gladstone Land and SBA Communications
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gladstone and SBA is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Land and SBA Communications Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBA Communications Corp 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 SBA Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBA Communications Corp has no effect on the direction of Gladstone Land i.e., Gladstone Land and SBA Communications go up and down completely randomly.
Pair Corralation between Gladstone Land and SBA Communications
Given the investment horizon of 90 days Gladstone Land is expected to generate 0.87 times more return on investment than SBA Communications. However, Gladstone Land is 1.15 times less risky than SBA Communications. It trades about 0.04 of its potential returns per unit of risk. SBA Communications Corp is currently generating about 0.0 per unit of risk. If you would invest 1,071 in Gladstone Land on November 2, 2024 and sell it today you would earn a total of 14.00 from holding Gladstone Land or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Land vs. SBA Communications Corp
Performance |
| Timeline |
| Gladstone Land |
| SBA Communications Corp |
Gladstone Land and SBA Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Land and SBA Communications
The main advantage of trading using opposite Gladstone Land and SBA Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Land position performs unexpectedly, SBA Communications 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 SBA Communications will offset losses from the drop in SBA Communications' long position.| Gladstone Land vs. Farmland Partners | Gladstone Land vs. STAG Industrial | Gladstone Land vs. Gladstone Commercial | Gladstone Land vs. LTC Properties |
| SBA Communications vs. American Tower Corp | SBA Communications vs. Digital Realty Trust | SBA Communications vs. Equinix | SBA Communications vs. Iron Mountain Incorporated |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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