Correlation Between Gaucho Group and Gladstone Land
Can any of the company-specific risk be diversified away by investing in both Gaucho Group 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 Gaucho Group and Gladstone Land into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaucho Group Holdings and Gladstone Land, you can compare the effects of market volatilities on Gaucho Group 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 Gaucho Group with a short position of Gladstone Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaucho Group and Gladstone Land.
Diversification Opportunities for Gaucho Group and Gladstone Land
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gaucho and Gladstone is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Gaucho Group Holdings and Gladstone Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Land and Gaucho Group 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 Gaucho Group Holdings 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 Gaucho Group i.e., Gaucho Group and Gladstone Land go up and down completely randomly.
Pair Corralation between Gaucho Group and Gladstone Land
Given the investment horizon of 90 days Gaucho Group Holdings is expected to under-perform the Gladstone Land. In addition to that, Gaucho Group is 17.17 times more volatile than Gladstone Land. It trades about -0.02 of its total potential returns per unit of risk. Gladstone Land is currently generating about 0.05 per unit of volatility. If you would invest 1,855 in Gladstone Land on August 30, 2024 and sell it today you would earn a total of 316.00 from holding Gladstone Land or generate 17.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 75.46% |
| Values | Daily Returns |
Gaucho Group Holdings vs. Gladstone Land
Performance |
| Timeline |
| Gaucho Group Holdings |
| Gladstone Land |
Gaucho Group and Gladstone Land Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaucho Group and Gladstone Land
The main advantage of trading using opposite Gaucho Group and Gladstone Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaucho Group 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.The idea behind Gaucho Group Holdings and Gladstone Land pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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