Correlation Between Gladstone Commercial and Viva Gold

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

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

Diversification Opportunities for Gladstone Commercial and Viva Gold

0.14

Correlation Coefficient

Gladstone Commercial  Viva Gold

Average diversification

The 3 months correlation between Gladstone and Viva is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Commercial and Viva Gold Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Viva Gold Corp and Gladstone Commercial 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 Commercial are associated (or correlated) with Viva Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Viva Gold Corp has no effect on the direction of Gladstone Commercial i.e., Gladstone Commercial and Viva Gold go up and down completely randomly.

Pair Corralation between Gladstone Commercial and Viva Gold

Given the investment horizon of 90 days Gladstone Commercial is expected to generate 0.17 times more return on investment than Viva Gold. However, Gladstone Commercial is 5.94 times less risky than Viva Gold. It trades about 0.03 of its potential returns per unit of risk. Viva Gold Corp is currently generating about -0.02 per unit of risk. If you would invest  1,582  in Gladstone Commercial on October 26, 2024 and sell it today you would earn a total of  30.00  from holding Gladstone Commercial or generate 1.9% return on investment over 90 days.

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

Gladstone Commercial  vs.  Viva Gold Corp

Gladstone Commercial

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Commercial are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Gladstone Commercial is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Viva Gold Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Viva Gold Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's fundamental 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 Commercial and Viva Gold

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

The idea behind Gladstone Commercial and Viva Gold 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.