Correlation Between De Grey and Stag Industrial
Can any of the company-specific risk be diversified away by investing in both De Grey 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 De Grey and Stag Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between De Grey Mining and Stag Industrial, you can compare the effects of market volatilities on De Grey 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 De Grey with a short position of Stag Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of De Grey and Stag Industrial.
Diversification Opportunities for De Grey and Stag Industrial
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DGD and Stag is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding De Grey Mining and Stag Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stag Industrial and De Grey 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 De Grey Mining 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 De Grey i.e., De Grey and Stag Industrial go up and down completely randomly.
Pair Corralation between De Grey and Stag Industrial
Assuming the 90 days trading horizon De Grey Mining is expected to generate 3.06 times more return on investment than Stag Industrial. However, De Grey is 3.06 times more volatile than Stag Industrial. It trades about 0.14 of its potential returns per unit of risk. Stag Industrial is currently generating about -0.04 per unit of risk. If you would invest 66.00 in De Grey Mining on November 4, 2024 and sell it today you would earn a total of 53.00 from holding De Grey Mining or generate 80.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
De Grey Mining vs. Stag Industrial
Performance |
| Timeline |
| De Grey Mining |
| Stag Industrial |
De Grey and Stag Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with De Grey and Stag Industrial
The main advantage of trading using opposite De Grey and Stag Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if De Grey 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.| De Grey vs. Citic Telecom International | De Grey vs. Verizon Communications | De Grey vs. Telecom Argentina SA | De Grey vs. Summit Hotel Properties |
| Stag Industrial vs. SIVERS SEMICONDUCTORS AB | Stag Industrial vs. NorAm Drilling AS | Stag Industrial vs. Volkswagen AG | Stag Industrial vs. Darden Restaurants |
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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