Correlation Between Farmland Partners and STAG Industrial
Can any of the company-specific risk be diversified away by investing in both Farmland Partners 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 Farmland Partners and STAG Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farmland Partners and STAG Industrial, you can compare the effects of market volatilities on Farmland Partners 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 Farmland Partners with a short position of STAG Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmland Partners and STAG Industrial.
Diversification Opportunities for Farmland Partners and STAG Industrial
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Farmland and STAG is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Farmland Partners and STAG Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAG Industrial and Farmland Partners 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 Farmland Partners 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 Farmland Partners i.e., Farmland Partners and STAG Industrial go up and down completely randomly.
Pair Corralation between Farmland Partners and STAG Industrial
Considering the 90-day investment horizon Farmland Partners is expected to generate 1.48 times more return on investment than STAG Industrial. However, Farmland Partners is 1.48 times more volatile than STAG Industrial. It trades about 0.35 of its potential returns per unit of risk. STAG Industrial is currently generating about -0.07 per unit of risk. If you would invest 1,104 in Farmland Partners on August 31, 2024 and sell it today you would earn a total of 167.00 from holding Farmland Partners or generate 15.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farmland Partners vs. STAG Industrial
Performance |
| Timeline |
| Farmland Partners |
| STAG Industrial |
Farmland Partners and STAG Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmland Partners and STAG Industrial
The main advantage of trading using opposite Farmland Partners and STAG Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmland Partners 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.| Farmland Partners vs. PotlatchDeltic Corp | Farmland Partners vs. Weyerhaeuser | Farmland Partners vs. Outfront Media | Farmland Partners vs. Gaming Leisure Properties |
| STAG Industrial vs. Public Storage | STAG Industrial vs. Extra Space Storage | STAG Industrial vs. Rexford Industrial Realty | STAG Industrial vs. Innovative Industrial Properties |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |