Correlation Between ITALIAN WINE and Stag Industrial
Can any of the company-specific risk be diversified away by investing in both ITALIAN WINE 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 ITALIAN WINE and Stag Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ITALIAN WINE BRANDS and Stag Industrial, you can compare the effects of market volatilities on ITALIAN WINE 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 ITALIAN WINE with a short position of Stag Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of ITALIAN WINE and Stag Industrial.
Diversification Opportunities for ITALIAN WINE and Stag Industrial
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ITALIAN and Stag is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding ITALIAN WINE BRANDS and Stag Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stag Industrial and ITALIAN WINE 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 ITALIAN WINE BRANDS 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 ITALIAN WINE i.e., ITALIAN WINE and Stag Industrial go up and down completely randomly.
Pair Corralation between ITALIAN WINE and Stag Industrial
Assuming the 90 days horizon ITALIAN WINE BRANDS is expected to generate 1.81 times more return on investment than Stag Industrial. However, ITALIAN WINE is 1.81 times more volatile than Stag Industrial. It trades about 0.04 of its potential returns per unit of risk. Stag Industrial is currently generating about -0.04 per unit of risk. If you would invest 2,040 in ITALIAN WINE BRANDS on November 4, 2024 and sell it today you would earn a total of 150.00 from holding ITALIAN WINE BRANDS or generate 7.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ITALIAN WINE BRANDS vs. Stag Industrial
Performance |
| Timeline |
| ITALIAN WINE BRANDS |
| Stag Industrial |
ITALIAN WINE and Stag Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ITALIAN WINE and Stag Industrial
The main advantage of trading using opposite ITALIAN WINE and Stag Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ITALIAN WINE 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.| ITALIAN WINE vs. Virtus Investment Partners | ITALIAN WINE vs. National Retail Properties | ITALIAN WINE vs. H2O Retailing | ITALIAN WINE vs. Burlington Stores |
| 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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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