Correlation Between Gladstone Land and Weyerhaeuser

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

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

Diversification Opportunities for Gladstone Land and Weyerhaeuser

0.33

Correlation Coefficient

Gladstone Land  Weyerhaeuser

Weak diversification

The 3 months correlation between Gladstone and Weyerhaeuser is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Gladstone Land and Weyerhaeuser in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Weyerhaeuser 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 Weyerhaeuser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Weyerhaeuser has no effect on the direction of Gladstone Land i.e., Gladstone Land and Weyerhaeuser go up and down completely randomly.

Pair Corralation between Gladstone Land and Weyerhaeuser

Given the investment horizon of 90 days Gladstone Land is expected to generate 1.26 times more return on investment than Weyerhaeuser. However, Gladstone Land is 1.26 times more volatile than Weyerhaeuser. It trades about 0.0 of its potential returns per unit of risk. Weyerhaeuser is currently generating about 0.0 per unit of risk. If you would invest  925.00  in Gladstone Land on May 6, 2025 and sell it today you would lose (12.00) from holding Gladstone Land or give up 1.3% of portfolio value over 90 days.

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

Gladstone Land  vs.  Weyerhaeuser

Gladstone Land

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gladstone Land has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Gladstone Land is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Weyerhaeuser

Risk-Adjusted Performance

Very Weak

Over the last 90 days Weyerhaeuser has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Weyerhaeuser is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Gladstone Land and Weyerhaeuser

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

The idea behind Gladstone Land and Weyerhaeuser 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.