Correlation Between Gladstone Land and American Tower

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

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

Diversification Opportunities for Gladstone Land and American Tower

0.34

Correlation Coefficient

Gladstone Land  American Tower

Weak diversification

The 3 months correlation between Gladstone and American is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Land and American Tower Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Tower Corp 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 American Tower. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Tower Corp has no effect on the direction of Gladstone Land i.e., Gladstone Land and American Tower go up and down completely randomly.

Pair Corralation between Gladstone Land and American Tower

Given the investment horizon of 90 days Gladstone Land is expected to generate 9.29 times less return on investment than American Tower. In addition to that, Gladstone Land is 1.1 times more volatile than American Tower Corp. It trades about 0.02 of its total potential returns per unit of risk. American Tower Corp is currently generating about 0.17 per unit of volatility. If you would invest  18,192  in American Tower Corp on December 30, 2024 and sell it today you would earn a total of  3,364  from holding American Tower Corp or generate 18.49% return on investment over 90 days.

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

Gladstone Land  vs.  American Tower Corp

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.

American Tower Corp

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in American Tower Corp are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak primary indicators, American Tower unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gladstone Land and American Tower

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

The idea behind Gladstone Land and American Tower 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.