Correlation Between Apple and Stag Industrial
Can any of the company-specific risk be diversified away by investing in both Apple 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 Apple and Stag Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and Stag Industrial, you can compare the effects of market volatilities on Apple 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 Apple with a short position of Stag Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and Stag Industrial.
Diversification Opportunities for Apple and Stag Industrial
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Apple and Stag is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and Stag Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stag Industrial and Apple 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 Apple Inc 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 Apple i.e., Apple and Stag Industrial go up and down completely randomly.
Pair Corralation between Apple and Stag Industrial
Assuming the 90 days trading horizon Apple Inc is expected to under-perform the Stag Industrial. In addition to that, Apple is 1.48 times more volatile than Stag Industrial. It trades about -0.47 of its total potential returns per unit of risk. Stag Industrial is currently generating about 0.11 per unit of volatility. If you would invest 3,249 in Stag Industrial on October 25, 2024 and sell it today you would earn a total of 63.00 from holding Stag Industrial or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. Stag Industrial
Performance |
| Timeline |
| Apple Inc |
| Stag Industrial |
Apple and Stag Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and Stag Industrial
The main advantage of trading using opposite Apple and Stag Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple 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.| Apple vs. FIRST SHIP LEASE | Apple vs. Yanzhou Coal Mining | Apple vs. MINCO SILVER | Apple vs. United Rentals |
| Stag Industrial vs. Apple Inc | Stag Industrial vs. Apple Inc | Stag Industrial vs. Apple Inc | Stag Industrial vs. Apple Inc |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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