Correlation Between Gladstone Land and Farmland Partners
Can any of the company-specific risk be diversified away by investing in both Gladstone Land and Farmland Partners 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 Farmland Partners 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 Farmland Partners, you can compare the effects of market volatilities on Gladstone Land and Farmland Partners 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 Farmland Partners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Land and Farmland Partners.
Diversification Opportunities for Gladstone Land and Farmland Partners
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gladstone and Farmland is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Land Corp and Farmland Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmland Partners 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 Farmland Partners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmland Partners has no effect on the direction of Gladstone Land i.e., Gladstone Land and Farmland Partners go up and down completely randomly.
Pair Corralation between Gladstone Land and Farmland Partners
Assuming the 90 days horizon Gladstone Land Corp is expected to generate 0.84 times more return on investment than Farmland Partners. However, Gladstone Land Corp is 1.19 times less risky than Farmland Partners. It trades about 0.01 of its potential returns per unit of risk. Farmland Partners is currently generating about -0.23 per unit of risk. If you would invest 2,010 in Gladstone Land Corp on January 21, 2025 and sell it today you would earn a total of 0.00 from holding Gladstone Land Corp or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Gladstone Land Corp vs. Farmland Partners
Performance |
| Timeline |
| Gladstone Land Corp |
| Farmland Partners |
Gladstone Land and Farmland Partners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Land and Farmland Partners
The main advantage of trading using opposite Gladstone Land and Farmland Partners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Land position performs unexpectedly, Farmland Partners 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 Farmland Partners will offset losses from the drop in Farmland Partners' long position.| Gladstone Land vs. Gladstone Land Corp | Gladstone Land vs. Gladstone Commercial Corp | Gladstone Land vs. AGNC Investment Corp | Gladstone Land vs. AGNC Investment Corp |
| Farmland Partners vs. PotlatchDeltic Corp | Farmland Partners vs. Weyerhaeuser | Farmland Partners vs. Outfront Media | Farmland Partners vs. Gaming Leisure Properties |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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