Correlation Between Gladstone Land and EPR Properties

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

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

Diversification Opportunities for Gladstone Land and EPR Properties

-0.15

Correlation Coefficient

Gladstone Land  EPR Properties

Good diversification

The 3 months correlation between Gladstone and EPR is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Land and EPR Properties Series in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EPR Properties Series 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 EPR Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EPR Properties Series has no effect on the direction of Gladstone Land i.e., Gladstone Land and EPR Properties go up and down completely randomly.

Pair Corralation between Gladstone Land and EPR Properties

Assuming the 90 days horizon Gladstone Land is expected to generate 0.99 times more return on investment than EPR Properties. However, Gladstone Land is 1.01 times less risky than EPR Properties. It trades about 0.02 of its potential returns per unit of risk. EPR Properties Series is currently generating about 0.02 per unit of risk. If you would invest  2,134  in Gladstone Land on September 12, 2024 and sell it today you would earn a total of  26.00  from holding Gladstone Land or generate 1.22% return on investment over 90 days.

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

Gladstone Land  vs.  EPR Properties Series

Gladstone Land

Risk-Adjusted Performance

1 of 100

Insignificant

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. Even with relatively invariable fundamental indicators, Gladstone Land is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

EPR Properties Series

Risk-Adjusted Performance

1 of 100

Weak

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

Pair Trading with Gladstone Land and EPR Properties

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

The idea behind Gladstone Land and EPR Properties Series 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.