Correlation Between Acadia Realty and Gladstone Land

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

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

Diversification Opportunities for Acadia Realty and Gladstone Land

0.27

Correlation Coefficient

Acadia Realty  Gladstone Land

Modest diversification

The 3 months correlation between Acadia and Gladstone is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Acadia Realty Trust and Gladstone Land in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Land and Acadia Realty 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 Acadia Realty Trust 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 Acadia Realty i.e., Acadia Realty and Gladstone Land go up and down completely randomly.

Pair Corralation between Acadia Realty and Gladstone Land

Considering the 90-day investment horizon Acadia Realty Trust is expected to under-perform the Gladstone Land. But the stock apears to be less risky and, when comparing its historical volatility, Acadia Realty Trust is 1.15 times less risky than Gladstone Land. The stock trades about -0.11 of its potential returns per unit of risk. The Gladstone Land is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  1,055  in Gladstone Land on December 29, 2024 and sell it today you would earn a total of  9.00  from holding Gladstone Land or generate 0.85% return on investment over 90 days.

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

Acadia Realty Trust  vs.  Gladstone Land

Acadia Realty Trust

Risk-Adjusted Performance

Very Weak

Over the last 90 days Acadia Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's forward-looking signals remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Gladstone Land

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Land are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Gladstone Land is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Acadia Realty and Gladstone Land

The main advantage of trading using opposite Acadia Realty and Gladstone Land positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Acadia Realty 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 Acadia Realty Trust 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.