Correlation Between STAG Industrial and Terreno Realty
Can any of the company-specific risk be diversified away by investing in both STAG Industrial and Terreno Realty 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 Terreno Realty into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STAG Industrial and Terreno Realty, you can compare the effects of market volatilities on STAG Industrial and Terreno Realty 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 Terreno Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of STAG Industrial and Terreno Realty.
Diversification Opportunities for STAG Industrial and Terreno Realty
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between STAG and Terreno is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding STAG Industrial and Terreno Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terreno Realty 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 Terreno Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terreno Realty has no effect on the direction of STAG Industrial i.e., STAG Industrial and Terreno Realty go up and down completely randomly.
Pair Corralation between STAG Industrial and Terreno Realty
Given the investment horizon of 90 days STAG Industrial is expected to generate 2.85 times less return on investment than Terreno Realty. In addition to that, STAG Industrial is 1.1 times more volatile than Terreno Realty. It trades about 0.16 of its total potential returns per unit of risk. Terreno Realty is currently generating about 0.5 per unit of volatility. If you would invest 5,851 in Terreno Realty on November 9, 2024 and sell it today you would earn a total of 916.00 from holding Terreno Realty or generate 15.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STAG Industrial vs. Terreno Realty
Performance |
| Timeline |
| STAG Industrial |
| Terreno Realty |
STAG Industrial and Terreno Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STAG Industrial and Terreno Realty
The main advantage of trading using opposite STAG Industrial and Terreno Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STAG Industrial position performs unexpectedly, Terreno Realty 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 Terreno Realty will offset losses from the drop in Terreno Realty'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 |
| Terreno Realty vs. Plymouth Industrial REIT | Terreno Realty vs. EastGroup Properties | Terreno Realty vs. LXP Industrial Trust | Terreno Realty vs. First Industrial Realty |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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