Correlation Between Gladstone Commercial and Douglas Emmett
Can any of the company-specific risk be diversified away by investing in both Gladstone Commercial and Douglas Emmett 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 Douglas Emmett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gladstone Commercial and Douglas Emmett, you can compare the effects of market volatilities on Gladstone Commercial and Douglas Emmett 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 Douglas Emmett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Commercial and Douglas Emmett.
Diversification Opportunities for Gladstone Commercial and Douglas Emmett
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Gladstone and Douglas is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Commercial and Douglas Emmett in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Douglas Emmett 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 Douglas Emmett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Douglas Emmett has no effect on the direction of Gladstone Commercial i.e., Gladstone Commercial and Douglas Emmett go up and down completely randomly.
Pair Corralation between Gladstone Commercial and Douglas Emmett
Given the investment horizon of 90 days Gladstone Commercial is expected to generate 0.54 times more return on investment than Douglas Emmett. However, Gladstone Commercial is 1.85 times less risky than Douglas Emmett. It trades about -0.01 of its potential returns per unit of risk. Douglas Emmett is currently generating about -0.03 per unit of risk. If you would invest 1,469 in Gladstone Commercial on March 19, 2025 and sell it today you would lose (24.00) from holding Gladstone Commercial or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gladstone Commercial vs. Douglas Emmett
Performance |
| Timeline |
| Gladstone Commercial |
| Douglas Emmett |
Gladstone Commercial and Douglas Emmett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gladstone Commercial and Douglas Emmett
The main advantage of trading using opposite Gladstone Commercial and Douglas Emmett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Commercial position performs unexpectedly, Douglas Emmett 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 Douglas Emmett will offset losses from the drop in Douglas Emmett's long position.| Gladstone Commercial vs. Gladstone Investment | Gladstone Commercial vs. Gladstone Capital | Gladstone Commercial vs. LTC Properties | Gladstone Commercial vs. Dynex Capital |
| Douglas Emmett vs. Brandywine Realty Trust | Douglas Emmett vs. Kilroy Realty Corp | Douglas Emmett vs. Piedmont Office Realty | Douglas Emmett vs. City Office |
Check out your portfolio center.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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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