Correlation Between One Liberty and Gladstone Commercial

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

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

Diversification Opportunities for One Liberty and Gladstone Commercial

0.59

Correlation Coefficient

One Liberty  Gladstone Commercial

Very weak diversification

The 3 months correlation between One and Gladstone is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding One Liberty 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 One Liberty 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 One Liberty 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 One Liberty i.e., One Liberty and Gladstone Commercial go up and down completely randomly.

Pair Corralation between One Liberty and Gladstone Commercial

Considering the 90-day investment horizon One Liberty Properties is expected to under-perform the Gladstone Commercial. In addition to that, One Liberty is 1.34 times more volatile than Gladstone Commercial Corp. It trades about -0.15 of its total potential returns per unit of risk. Gladstone Commercial Corp is currently generating about -0.08 per unit of volatility. If you would invest  2,372  in Gladstone Commercial Corp on November 28, 2024 and sell it today you would lose (111.00) from holding Gladstone Commercial Corp or give up 4.68% of portfolio value over 90 days.

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

One Liberty Properties  vs.  Gladstone Commercial Corp

One Liberty Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days One Liberty Properties has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's essential indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Gladstone Commercial Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gladstone Commercial Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Gladstone Commercial is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with One Liberty and Gladstone Commercial

The main advantage of trading using opposite One Liberty and Gladstone Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Liberty 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 One Liberty 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 Stocks Directory module to find actively traded stocks across global markets.