Correlation Between STAG Industrial and Main Street
Can any of the company-specific risk be diversified away by investing in both STAG Industrial and Main Street 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 Main Street into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STAG Industrial and Main Street Capital, you can compare the effects of market volatilities on STAG Industrial and Main Street 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 Main Street. Check out your portfolio center. Please also check ongoing floating volatility patterns of STAG Industrial and Main Street.
Diversification Opportunities for STAG Industrial and Main Street
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between STAG and Main is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding STAG Industrial and Main Street Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Main Street Capital 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 Main Street. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Main Street Capital has no effect on the direction of STAG Industrial i.e., STAG Industrial and Main Street go up and down completely randomly.
Pair Corralation between STAG Industrial and Main Street
Given the investment horizon of 90 days STAG Industrial is expected to under-perform the Main Street. In addition to that, STAG Industrial is 1.52 times more volatile than Main Street Capital. It trades about -0.17 of its total potential returns per unit of risk. Main Street Capital is currently generating about 0.19 per unit of volatility. If you would invest 5,141 in Main Street Capital on August 24, 2024 and sell it today you would earn a total of 177.00 from holding Main Street Capital or generate 3.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STAG Industrial vs. Main Street Capital
Performance |
| Timeline |
| STAG Industrial |
| Main Street Capital |
STAG Industrial and Main Street Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STAG Industrial and Main Street
The main advantage of trading using opposite STAG Industrial and Main Street positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STAG Industrial position performs unexpectedly, Main Street 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 Main Street will offset losses from the drop in Main Street's long position.| STAG Industrial vs. Public Storage | STAG Industrial vs. Extra Space Storage | STAG Industrial vs. Rexford Industrial Realty | STAG Industrial vs. Innovative Industrial Properties |
| Main Street vs. Gladstone Capital | Main Street vs. PennantPark Floating Rate | Main Street vs. Horizon Technology Finance | Main Street vs. Prospect Capital |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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