Correlation Between Gladstone Commercial and Hawaiian Tax-free

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

By analyzing existing cross correlation between Gladstone Commercial and Hawaiian Tax Free Trust, you can compare the effects of market volatilities on Gladstone Commercial and Hawaiian Tax-free 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 Hawaiian Tax-free. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gladstone Commercial and Hawaiian Tax-free.

Diversification Opportunities for Gladstone Commercial and Hawaiian Tax-free

-0.23

Correlation Coefficient

Gladstone Commercial  Hawaiian Tax-free

Very good diversification

The 3 months correlation between Gladstone and Hawaiian is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Commercial and Hawaiian Tax Free Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hawaiian Tax Free 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 Hawaiian Tax-free. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hawaiian Tax Free has no effect on the direction of Gladstone Commercial i.e., Gladstone Commercial and Hawaiian Tax-free go up and down completely randomly.

Pair Corralation between Gladstone Commercial and Hawaiian Tax-free

Given the investment horizon of 90 days Gladstone Commercial is expected to generate 12.27 times more return on investment than Hawaiian Tax-free. However, Gladstone Commercial is 12.27 times more volatile than Hawaiian Tax Free Trust. It trades about 0.17 of its potential returns per unit of risk. Hawaiian Tax Free Trust is currently generating about -0.18 per unit of risk. If you would invest  1,245  in Gladstone Commercial on March 3, 2024 and sell it today you would earn a total of  194.00  from holding Gladstone Commercial or generate 15.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Gladstone Commercial  vs.  Hawaiian Tax Free Trust

Gladstone Commercial

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gladstone Commercial are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Gladstone Commercial exhibited solid returns over the last few months and may actually be approaching a breakup point.

Hawaiian Tax Free

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hawaiian Tax Free Trust has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Hawaiian Tax-free is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gladstone Commercial and Hawaiian Tax-free

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

The idea behind Gladstone Commercial and Hawaiian Tax Free Trust 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.

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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.