Correlation Between Weyerhaeuser and Gladstone Land

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

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

Diversification Opportunities for Weyerhaeuser and Gladstone Land

0.33

Correlation Coefficient

Weyerhaeuser  Gladstone Land

Weak diversification

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

Pair Corralation between Weyerhaeuser and Gladstone Land

Allowing for the 90-day total investment horizon Weyerhaeuser is expected to under-perform the Gladstone Land. But the stock apears to be less risky and, when comparing its historical volatility, Weyerhaeuser is 1.26 times less risky than Gladstone Land. The stock trades about 0.0 of its potential returns per unit of risk. The Gladstone Land is currently generating about 0.0 of returns per unit of risk over similar time horizon. 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

Weyerhaeuser  vs.  Gladstone Land

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.

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.

Pair Trading with Weyerhaeuser and Gladstone Land

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

The idea behind Weyerhaeuser and Gladstone Land 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.