Correlation Between STAG Industrial and Medical Properties
Can any of the company-specific risk be diversified away by investing in both STAG Industrial and Medical Properties 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 Medical Properties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STAG Industrial and Medical Properties Trust, you can compare the effects of market volatilities on STAG Industrial and Medical Properties 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 Medical Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of STAG Industrial and Medical Properties.
Diversification Opportunities for STAG Industrial and Medical Properties
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between STAG and Medical is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding STAG Industrial and Medical Properties Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medical Properties Trust 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 Medical Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medical Properties Trust has no effect on the direction of STAG Industrial i.e., STAG Industrial and Medical Properties go up and down completely randomly.
Pair Corralation between STAG Industrial and Medical Properties
Given the investment horizon of 90 days STAG Industrial is expected to generate 0.33 times more return on investment than Medical Properties. However, STAG Industrial is 3.02 times less risky than Medical Properties. It trades about 0.04 of its potential returns per unit of risk. Medical Properties Trust is currently generating about -0.02 per unit of risk. If you would invest 2,961 in STAG Industrial on August 27, 2024 and sell it today you would earn a total of 687.00 from holding STAG Industrial or generate 23.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STAG Industrial vs. Medical Properties Trust
Performance |
| Timeline |
| STAG Industrial |
| Medical Properties Trust |
STAG Industrial and Medical Properties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STAG Industrial and Medical Properties
The main advantage of trading using opposite STAG Industrial and Medical Properties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STAG Industrial position performs unexpectedly, Medical Properties 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 Medical Properties will offset losses from the drop in Medical Properties' 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 |
| Medical Properties vs. Sabra Healthcare REIT | Medical Properties vs. LTC Properties | Medical Properties vs. Healthpeak Properties | Medical Properties vs. National Health Investors |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |