Correlation Between ALERION CLEANPOWER and Stag Industrial
Can any of the company-specific risk be diversified away by investing in both ALERION CLEANPOWER 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 ALERION CLEANPOWER and Stag Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALERION CLEANPOWER and Stag Industrial, you can compare the effects of market volatilities on ALERION CLEANPOWER 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 ALERION CLEANPOWER with a short position of Stag Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALERION CLEANPOWER and Stag Industrial.
Diversification Opportunities for ALERION CLEANPOWER and Stag Industrial
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between ALERION and Stag is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding ALERION CLEANPOWER and Stag Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stag Industrial and ALERION CLEANPOWER 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 ALERION CLEANPOWER 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 ALERION CLEANPOWER i.e., ALERION CLEANPOWER and Stag Industrial go up and down completely randomly.
Pair Corralation between ALERION CLEANPOWER and Stag Industrial
Assuming the 90 days trading horizon ALERION CLEANPOWER is expected to under-perform the Stag Industrial. In addition to that, ALERION CLEANPOWER is 1.13 times more volatile than Stag Industrial. It trades about -0.14 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 3,259 in Stag Industrial on October 20, 2024 and sell it today you would earn a total of 85.00 from holding Stag Industrial or generate 2.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALERION CLEANPOWER vs. Stag Industrial
Performance |
| Timeline |
| ALERION CLEANPOWER |
| Stag Industrial |
ALERION CLEANPOWER and Stag Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALERION CLEANPOWER and Stag Industrial
The main advantage of trading using opposite ALERION CLEANPOWER and Stag Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALERION CLEANPOWER 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.| ALERION CLEANPOWER vs. Altair Engineering | ALERION CLEANPOWER vs. Wizz Air Holdings | ALERION CLEANPOWER vs. Alaska Air Group | ALERION CLEANPOWER vs. SOGECLAIR SA INH |
| 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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