Correlation Between Power REIT and Gladstone Land
Can any of the company-specific risk be diversified away by investing in both Power REIT 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 Power REIT and Gladstone Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power REIT and Gladstone Land, you can compare the effects of market volatilities on Power REIT 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 Power REIT with a short position of Gladstone Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power REIT and Gladstone Land.
Diversification Opportunities for Power REIT and Gladstone Land
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Power and Gladstone is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Power REIT and Gladstone Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Land and Power REIT 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 Power REIT 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 Power REIT i.e., Power REIT and Gladstone Land go up and down completely randomly.
Pair Corralation between Power REIT and Gladstone Land
Allowing for the 90-day total investment horizon Power REIT is expected to generate 9.74 times more return on investment than Gladstone Land. However, Power REIT is 9.74 times more volatile than Gladstone Land. It trades about 0.01 of its potential returns per unit of risk. Gladstone Land is currently generating about 0.05 per unit of risk. If you would invest 494.00 in Power REIT on August 30, 2024 and sell it today you would lose (380.00) from holding Power REIT or give up 76.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 75.15% |
| Values | Daily Returns |
Power REIT vs. Gladstone Land
Performance |
| Timeline |
| Power REIT |
| Gladstone Land |
Power REIT and Gladstone Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power REIT and Gladstone Land
The main advantage of trading using opposite Power REIT and Gladstone Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power REIT 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.| Power REIT vs. Newlake Capital Partners | Power REIT vs. Outfront Media | Power REIT vs. Uniti Group | Power REIT vs. Farmland Partners |
| Gladstone Land vs. EPR Properties Series | Gladstone Land vs. EPR Properties | Gladstone Land vs. EPR Properties | Gladstone Land vs. Gladstone Land Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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