Correlation Between Gladstone Land and NYSE Composite
Can any of the company-specific risk be diversified away by investing in both Gladstone Land and NYSE Composite 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 NYSE Composite into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Land and NYSE Composite, you can compare the effects of market volatilities on Gladstone Land and NYSE Composite 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 NYSE Composite. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Land and NYSE Composite.
Diversification Opportunities for Gladstone Land and NYSE Composite
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gladstone and NYSE is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Land and NYSE Composite in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NYSE Composite 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 are associated (or correlated) with NYSE Composite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NYSE Composite has no effect on the direction of Gladstone Land i.e., Gladstone Land and NYSE Composite go up and down completely randomly.
Pair Corralation between Gladstone Land and NYSE Composite
Given the investment horizon of 90 days Gladstone Land is expected to generate 2.45 times more return on investment than NYSE Composite. However, Gladstone Land is 2.45 times more volatile than NYSE Composite. It trades about -0.01 of its potential returns per unit of risk. NYSE Composite is currently generating about -0.11 per unit of risk. If you would invest 1,279 in Gladstone Land on January 26, 2024 and sell it today you would lose (9.00) from holding Gladstone Land or give up 0.7% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Gladstone Land vs. NYSE Composite
Performance |
Timeline |
Gladstone Land and NYSE Composite Volatility Contrast
Predicted Return Density |
Returns |
Gladstone Land
Pair trading matchups for Gladstone Land
NYSE Composite
Pair trading matchups for NYSE Composite
Pair Trading with Gladstone Land and NYSE Composite
The main advantage of trading using opposite Gladstone Land and NYSE Composite positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Land position performs unexpectedly, NYSE Composite 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 NYSE Composite will offset losses from the drop in NYSE Composite's long position.Gladstone Land vs. Farmland Partners | Gladstone Land vs. STAG Industrial | Gladstone Land vs. Gladstone Commercial | Gladstone Land vs. LTC Properties |
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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 AI Investment Finder module to use AI to screen and filter profitable investment opportunities.
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