Correlation Between STAG Industrial, and LPL Financial
Can any of the company-specific risk be diversified away by investing in both STAG Industrial, and LPL Financial 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 STAG Industrial, and LPL Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STAG Industrial, and LPL Financial Holdings, you can compare the effects of market volatilities on STAG Industrial, and LPL Financial 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 STAG Industrial, with a short position of LPL Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of STAG Industrial, and LPL Financial.
Diversification Opportunities for STAG Industrial, and LPL Financial
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STAG and LPL is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding STAG Industrial, and LPL Financial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPL Financial Holdings and STAG Industrial, 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 STAG Industrial, are associated (or correlated) with LPL Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPL Financial Holdings has no effect on the direction of STAG Industrial, i.e., STAG Industrial, and LPL Financial go up and down completely randomly.
Pair Corralation between STAG Industrial, and LPL Financial
Assuming the 90 days trading horizon STAG Industrial, is expected to generate 6.83 times less return on investment than LPL Financial. But when comparing it to its historical volatility, STAG Industrial, is 1.79 times less risky than LPL Financial. It trades about 0.02 of its potential returns per unit of risk. LPL Financial Holdings is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 6,945 in LPL Financial Holdings on October 27, 2024 and sell it today you would earn a total of 4,807 from holding LPL Financial Holdings or generate 69.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 41.96% |
| Values | Daily Returns |
STAG Industrial, vs. LPL Financial Holdings
Performance |
| Timeline |
| STAG Industrial, |
| LPL Financial Holdings |
STAG Industrial, and LPL Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STAG Industrial, and LPL Financial
The main advantage of trading using opposite STAG Industrial, and LPL Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STAG Industrial, position performs unexpectedly, LPL Financial 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 LPL Financial will offset losses from the drop in LPL Financial's long position.| STAG Industrial, vs. Fidelity National Information | STAG Industrial, vs. Public Storage | STAG Industrial, vs. Brpr Corporate Offices | STAG Industrial, vs. ON Semiconductor |
| LPL Financial vs. TAL Education Group | LPL Financial vs. Cardinal Health, | LPL Financial vs. Patria Investments Limited | LPL Financial vs. HCA Healthcare, |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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