Correlation Between Gladstone Land and OFS Credit
Can any of the company-specific risk be diversified away by investing in both Gladstone Land and OFS Credit 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 OFS Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Land Corp and OFS Credit, you can compare the effects of market volatilities on Gladstone Land and OFS Credit 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 OFS Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Land and OFS Credit.
Diversification Opportunities for Gladstone Land and OFS Credit
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Gladstone and OFS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Land Corp and OFS Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on OFS Credit 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 Corp are associated (or correlated) with OFS Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of OFS Credit has no effect on the direction of Gladstone Land i.e., Gladstone Land and OFS Credit go up and down completely randomly.
Pair Corralation between Gladstone Land and OFS Credit
Assuming the 90 days horizon Gladstone Land is expected to generate 1.48 times less return on investment than OFS Credit. But when comparing it to its historical volatility, Gladstone Land Corp is 2.48 times less risky than OFS Credit. It trades about 0.2 of its potential returns per unit of risk. OFS Credit is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2,447 in OFS Credit on November 9, 2024 and sell it today you would earn a total of 29.00 from holding OFS Credit or generate 1.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Land Corp vs. OFS Credit
Performance |
| Timeline |
| Gladstone Land Corp |
| OFS Credit |
Gladstone Land and OFS Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Land and OFS Credit
The main advantage of trading using opposite Gladstone Land and OFS Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Land position performs unexpectedly, OFS Credit 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 OFS Credit will offset losses from the drop in OFS Credit's long position.| Gladstone Land vs. EPR Properties | Gladstone Land vs. Digital Realty Trust | Gladstone Land vs. EPR Properties Series | Gladstone Land vs. Digital Realty Trust |
| OFS Credit vs. Oxford Lane Capital | OFS Credit vs. OFS Credit | OFS Credit vs. XOMA Corporation | OFS Credit vs. Oxford Lane Capital |
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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