Correlation Between LTC Properties and Gladstone Land
Can any of the company-specific risk be diversified away by investing in both LTC Properties and Gladstone Land 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 LTC Properties and Gladstone Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LTC Properties and Gladstone Land, you can compare the effects of market volatilities on LTC Properties and Gladstone Land 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 LTC Properties with a short position of Gladstone Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of LTC Properties and Gladstone Land.
Diversification Opportunities for LTC Properties and Gladstone Land
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between LTC and Gladstone is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding LTC Properties and Gladstone Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Land and LTC Properties 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 LTC Properties are associated (or correlated) with Gladstone Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Land has no effect on the direction of LTC Properties i.e., LTC Properties and Gladstone Land go up and down completely randomly.
Pair Corralation between LTC Properties and Gladstone Land
Considering the 90-day investment horizon LTC Properties is expected to generate 0.77 times more return on investment than Gladstone Land. However, LTC Properties is 1.3 times less risky than Gladstone Land. It trades about 0.0 of its potential returns per unit of risk. Gladstone Land is currently generating about -0.27 per unit of risk. If you would invest 3,881 in LTC Properties on August 31, 2024 and sell it today you would lose (11.00) from holding LTC Properties or give up 0.28% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
LTC Properties vs. Gladstone Land
Performance |
| Timeline |
| LTC Properties |
| Gladstone Land |
LTC Properties and Gladstone Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LTC Properties and Gladstone Land
The main advantage of trading using opposite LTC Properties and Gladstone Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LTC Properties position performs unexpectedly, Gladstone Land 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 Gladstone Land will offset losses from the drop in Gladstone Land's long position.| LTC Properties vs. Sabra Healthcare REIT | LTC Properties vs. Healthpeak Properties | LTC Properties vs. National Health Investors | LTC Properties vs. Omega Healthcare Investors |
| Gladstone Land vs. Farmland Partners | Gladstone Land vs. STAG Industrial | Gladstone Land vs. Gladstone Commercial | Gladstone Land vs. LTC 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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