Correlation Between NIPPON PROLOGIS and STAG Industrial
Can any of the company-specific risk be diversified away by investing in both NIPPON PROLOGIS and STAG Industrial 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 NIPPON PROLOGIS and STAG Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NIPPON PROLOGIS REIT and STAG Industrial, you can compare the effects of market volatilities on NIPPON PROLOGIS and STAG Industrial 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 NIPPON PROLOGIS with a short position of STAG Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIPPON PROLOGIS and STAG Industrial.
Diversification Opportunities for NIPPON PROLOGIS and STAG Industrial
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between NIPPON and STAG is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding NIPPON PROLOGIS REIT and STAG Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAG Industrial and NIPPON PROLOGIS 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 NIPPON PROLOGIS REIT are associated (or correlated) with STAG Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STAG Industrial has no effect on the direction of NIPPON PROLOGIS i.e., NIPPON PROLOGIS and STAG Industrial go up and down completely randomly.
Pair Corralation between NIPPON PROLOGIS and STAG Industrial
Assuming the 90 days trading horizon NIPPON PROLOGIS is expected to generate 1.33 times less return on investment than STAG Industrial. In addition to that, NIPPON PROLOGIS is 1.31 times more volatile than STAG Industrial. It trades about 0.12 of its total potential returns per unit of risk. STAG Industrial is currently generating about 0.21 per unit of volatility. If you would invest 3,184 in STAG Industrial on November 10, 2024 and sell it today you would earn a total of 169.00 from holding STAG Industrial or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
NIPPON PROLOGIS REIT vs. STAG Industrial
Performance |
| Timeline |
| NIPPON PROLOGIS REIT |
| STAG Industrial |
NIPPON PROLOGIS and STAG Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIPPON PROLOGIS and STAG Industrial
The main advantage of trading using opposite NIPPON PROLOGIS and STAG Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIPPON PROLOGIS position performs unexpectedly, STAG Industrial 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 STAG Industrial will offset losses from the drop in STAG Industrial's long position.| NIPPON PROLOGIS vs. SMA Solar Technology | NIPPON PROLOGIS vs. MACOM Technology Solutions | NIPPON PROLOGIS vs. Take Two Interactive Software | NIPPON PROLOGIS vs. Commonwealth Bank of |
| STAG Industrial vs. FARM 51 GROUP | STAG Industrial vs. WIMFARM SA EO | STAG Industrial vs. AIR LIQUIDE ADR | STAG Industrial vs. Penta Ocean Construction Co |
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 Stocks Directory module to find actively traded stocks across global markets.
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