Correlation Between Gladstone Commercial and 4 Less

Can any of the company-specific risk be diversified away by investing in both Gladstone Commercial and 4 Less 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 4 Less into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Gladstone Commercial and 4 Less Group, you can compare the effects of market volatilities on Gladstone Commercial and 4 Less 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 4 Less. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Commercial and 4 Less.

Diversification Opportunities for Gladstone Commercial and 4 Less

-0.54

Correlation Coefficient

Gladstone Commercial  4 Less

Excellent diversification

The 3 months correlation between Gladstone and FLES is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Commercial and 4 Less Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 4 Less Group 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 4 Less. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 4 Less Group has no effect on the direction of Gladstone Commercial i.e., Gladstone Commercial and 4 Less go up and down completely randomly.

Pair Corralation between Gladstone Commercial and 4 Less

Given the investment horizon of 90 days Gladstone Commercial is expected to generate 22.79 times less return on investment than 4 Less. But when comparing it to its historical volatility, Gladstone Commercial is 16.46 times less risky than 4 Less. It trades about 0.03 of its potential returns per unit of risk. 4 Less Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  0.04  in 4 Less Group on September 25, 2024 and sell it today you would lose (0.02) from holding 4 Less Group or give up 50.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	96.92%
Values	Daily Returns

Gladstone Commercial  vs.  4 Less Group

Gladstone Commercial

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Commercial are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound basic indicators, Gladstone Commercial is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

4 Less Group

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in 4 Less Group are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent technical and fundamental indicators, 4 Less unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gladstone Commercial and 4 Less

The main advantage of trading using opposite Gladstone Commercial and 4 Less positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gladstone Commercial position performs unexpectedly, 4 Less 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 4 Less will offset losses from the drop in 4 Less' long position.

The idea behind Gladstone Commercial and 4 Less Group 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.