Correlation Between Generation Income and Gladstone Commercial

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

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

Diversification Opportunities for Generation Income and Gladstone Commercial

-0.61

Correlation Coefficient

Generation Income  Gladstone Commercial

Excellent diversification

The 3 months correlation between Generation and Gladstone is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Generation Income Properties and Gladstone Commercial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Commercial Corp and Generation Income 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 Generation Income Properties are associated (or correlated) with Gladstone Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Commercial Corp has no effect on the direction of Generation Income i.e., Generation Income and Gladstone Commercial go up and down completely randomly.

Pair Corralation between Generation Income and Gladstone Commercial

If you would invest  2,259  in Gladstone Commercial Corp on September 3, 2024 and sell it today you would earn a total of  157.00  from holding Gladstone Commercial Corp or generate 6.95% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	1.56%
Values	Daily Returns

Generation Income Properties  vs.  Gladstone Commercial Corp

Generation Income

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Generation Income Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Generation Income is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Gladstone Commercial Corp

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Commercial Corp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating fundamental indicators, Gladstone Commercial may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Generation Income and Gladstone Commercial

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

The idea behind Generation Income Properties and Gladstone Commercial Corp 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.