Correlation Between Crown Castle and Gladstone Land

Can any of the company-specific risk be diversified away by investing in both Crown Castle 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 Crown Castle and Gladstone Land into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Crown Castle and Gladstone Land, you can compare the effects of market volatilities on Crown Castle 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 Crown Castle with a short position of Gladstone Land. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Castle and Gladstone Land.

Diversification Opportunities for Crown Castle and Gladstone Land

0.48

Correlation Coefficient

Crown Castle  Gladstone Land

Very weak diversification

The 3 months correlation between Crown and Gladstone is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Crown Castle and Gladstone Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Land and Crown Castle 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 Crown Castle 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 Crown Castle i.e., Crown Castle and Gladstone Land go up and down completely randomly.

Pair Corralation between Crown Castle and Gladstone Land

Considering the 90-day investment horizon Crown Castle is expected to generate 0.87 times more return on investment than Gladstone Land. However, Crown Castle is 1.15 times less risky than Gladstone Land. It trades about -0.05 of its potential returns per unit of risk. Gladstone Land is currently generating about -0.09 per unit of risk. If you would invest  16,391  in Crown Castle on January 20, 2024 and sell it today you would lose (6,871) from holding Crown Castle or give up 41.92% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

Crown Castle  vs.  Gladstone Land

Crown Castle

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Crown Castle has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Gladstone Land

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gladstone Land has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Crown Castle and Gladstone Land

The main advantage of trading using opposite Crown Castle and Gladstone Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Castle 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 Crown Castle 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.

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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.