Correlation Between Realty Income and STAG Industrial
Can any of the company-specific risk be diversified away by investing in both Realty Income 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 Realty Income and STAG Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Realty Income and STAG Industrial, you can compare the effects of market volatilities on Realty Income 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 Realty Income with a short position of STAG Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Realty Income and STAG Industrial.
Diversification Opportunities for Realty Income and STAG Industrial
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Realty and STAG is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Realty Income and STAG Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAG Industrial and Realty Income 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 Realty Income 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 Realty Income i.e., Realty Income and STAG Industrial go up and down completely randomly.
Pair Corralation between Realty Income and STAG Industrial
Taking into account the 90-day investment horizon Realty Income is expected to under-perform the STAG Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Realty Income is 1.08 times less risky than STAG Industrial. The stock trades about -0.25 of its potential returns per unit of risk. The STAG Industrial is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 3,736 in STAG Industrial on August 27, 2024 and sell it today you would lose (88.00) from holding STAG Industrial or give up 2.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Realty Income vs. STAG Industrial
Performance |
| Timeline |
| Realty Income |
| STAG Industrial |
Realty Income and STAG Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Realty Income and STAG Industrial
The main advantage of trading using opposite Realty Income and STAG Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Realty Income 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.| Realty Income vs. Federal Realty Investment | Realty Income vs. Macerich Company | Realty Income vs. National Retail Properties | Realty Income vs. Kimco Realty |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Transaction History View history of all your transactions and understand their impact on performance | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |