Correlation Between Gladstone Land and Outfront Media

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

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

Diversification Opportunities for Gladstone Land and Outfront Media

0.29

Correlation Coefficient

Gladstone Land  Outfront Media

Modest diversification

The 3 months correlation between Gladstone and Outfront is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Land and Outfront Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Outfront Media 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 Outfront Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Outfront Media has no effect on the direction of Gladstone Land i.e., Gladstone Land and Outfront Media go up and down completely randomly.

Pair Corralation between Gladstone Land and Outfront Media

Given the investment horizon of 90 days Gladstone Land is expected to generate 0.92 times more return on investment than Outfront Media. However, Gladstone Land is 1.08 times less risky than Outfront Media. It trades about 0.02 of its potential returns per unit of risk. Outfront Media is currently generating about -0.05 per unit of risk. If you would invest  1,055  in Gladstone Land on December 30, 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

Gladstone Land  vs.  Outfront Media

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.

Outfront Media

Risk-Adjusted Performance

Very Weak

Over the last 90 days Outfront Media 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 stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Gladstone Land and Outfront Media

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

The idea behind Gladstone Land and Outfront Media 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.