Correlation Between Gladstone Land and PPG Industries

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

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

Diversification Opportunities for Gladstone Land and PPG Industries

0.43

Correlation Coefficient

Gladstone Land  PPG Industries

Very weak diversification

The 3 months correlation between Gladstone and PPG is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Land and PPG Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPG Industries 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 PPG Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPG Industries has no effect on the direction of Gladstone Land i.e., Gladstone Land and PPG Industries go up and down completely randomly.

Pair Corralation between Gladstone Land and PPG Industries

Given the investment horizon of 90 days Gladstone Land is expected to under-perform the PPG Industries. In addition to that, Gladstone Land is 1.31 times more volatile than PPG Industries. It trades about -0.04 of its total potential returns per unit of risk. PPG Industries is currently generating about -0.01 per unit of volatility. If you would invest  13,717  in PPG Industries on January 25, 2024 and sell it today you would lose (674.00) from holding PPG Industries or give up 4.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Gladstone Land  vs.  PPG Industries

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.

PPG Industries

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PPG Industries has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Gladstone Land and PPG Industries

The main advantage of trading using opposite Gladstone Land and PPG Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Land position performs unexpectedly, PPG Industries 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 PPG Industries will offset losses from the drop in PPG Industries' long position.

The idea behind Gladstone Land and PPG Industries 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.