Correlation Between Gladstone Land and Digital Realty
Can any of the company-specific risk be diversified away by investing in both Gladstone Land and Digital Realty 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 Digital Realty 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 Digital Realty Trust, you can compare the effects of market volatilities on Gladstone Land and Digital Realty 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 Digital Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Land and Digital Realty.
Diversification Opportunities for Gladstone Land and Digital Realty
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Gladstone and Digital is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Land Corp and Digital Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Realty Trust 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 Digital Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Realty Trust has no effect on the direction of Gladstone Land i.e., Gladstone Land and Digital Realty go up and down completely randomly.
Pair Corralation between Gladstone Land and Digital Realty
Assuming the 90 days horizon Gladstone Land Corp is expected to generate 1.05 times more return on investment than Digital Realty. However, Gladstone Land is 1.05 times more volatile than Digital Realty Trust. It trades about 0.23 of its potential returns per unit of risk. Digital Realty Trust is currently generating about -0.2 per unit of risk. If you would invest 2,144 in Gladstone Land Corp on August 28, 2024 and sell it today you would earn a total of 87.00 from holding Gladstone Land Corp or generate 4.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Land Corp vs. Digital Realty Trust
Performance |
| Timeline |
| Gladstone Land Corp |
| Digital Realty Trust |
Gladstone Land and Digital Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Land and Digital Realty
The main advantage of trading using opposite Gladstone Land and Digital Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Land position performs unexpectedly, Digital Realty 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 Digital Realty will offset losses from the drop in Digital Realty'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 |
| Digital Realty vs. EPR Properties Series | Digital Realty vs. EPR Properties | Digital Realty vs. EPR Properties | Digital Realty vs. Digital Realty Trust |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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