Correlation Between STAG Industrial and Braemar Hotel
Can any of the company-specific risk be diversified away by investing in both STAG Industrial and Braemar Hotel 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 Braemar Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STAG Industrial and Braemar Hotel Resorts, you can compare the effects of market volatilities on STAG Industrial and Braemar Hotel 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 Braemar Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of STAG Industrial and Braemar Hotel.
Diversification Opportunities for STAG Industrial and Braemar Hotel
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STAG and Braemar is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding STAG Industrial and Braemar Hotel Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braemar Hotel Resorts 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 Braemar Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braemar Hotel Resorts has no effect on the direction of STAG Industrial i.e., STAG Industrial and Braemar Hotel go up and down completely randomly.
Pair Corralation between STAG Industrial and Braemar Hotel
Given the investment horizon of 90 days STAG Industrial is expected to generate 4.68 times less return on investment than Braemar Hotel. But when comparing it to its historical volatility, STAG Industrial is 3.04 times less risky than Braemar Hotel. It trades about 0.05 of its potential returns per unit of risk. Braemar Hotel Resorts is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 271.00 in Braemar Hotel Resorts on September 2, 2024 and sell it today you would earn a total of 89.00 from holding Braemar Hotel Resorts or generate 32.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STAG Industrial vs. Braemar Hotel Resorts
Performance |
| Timeline |
| STAG Industrial |
| Braemar Hotel Resorts |
STAG Industrial and Braemar Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STAG Industrial and Braemar Hotel
The main advantage of trading using opposite STAG Industrial and Braemar Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STAG Industrial position performs unexpectedly, Braemar Hotel 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 Braemar Hotel will offset losses from the drop in Braemar Hotel's long position.| STAG Industrial vs. Douglas Emmett | STAG Industrial vs. Vornado Realty Trust | STAG Industrial vs. Highwoods Properties | STAG Industrial vs. Piedmont Office Realty |
| Braemar Hotel vs. Ryman Hospitality Properties | Braemar Hotel vs. Service Properties Trust | Braemar Hotel vs. RLJ Lodging Trust |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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