Correlation Between Stag Industrial and Peijia Medical
Can any of the company-specific risk be diversified away by investing in both Stag Industrial and Peijia Medical 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 Peijia Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stag Industrial and Peijia Medical Limited, you can compare the effects of market volatilities on Stag Industrial and Peijia Medical 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 Peijia Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stag Industrial and Peijia Medical.
Diversification Opportunities for Stag Industrial and Peijia Medical
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stag and Peijia is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Stag Industrial and Peijia Medical Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peijia Medical 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 Peijia Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peijia Medical has no effect on the direction of Stag Industrial i.e., Stag Industrial and Peijia Medical go up and down completely randomly.
Pair Corralation between Stag Industrial and Peijia Medical
Assuming the 90 days trading horizon Stag Industrial is expected to generate 0.35 times more return on investment than Peijia Medical. However, Stag Industrial is 2.86 times less risky than Peijia Medical. It trades about 0.02 of its potential returns per unit of risk. Peijia Medical Limited is currently generating about -0.03 per unit of risk. If you would invest 3,063 in Stag Industrial on October 28, 2024 and sell it today you would earn a total of 200.00 from holding Stag Industrial or generate 6.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 96.81% |
| Values | Daily Returns |
Stag Industrial vs. Peijia Medical Limited
Performance |
| Timeline |
| Stag Industrial |
| Peijia Medical |
Stag Industrial and Peijia Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stag Industrial and Peijia Medical
The main advantage of trading using opposite Stag Industrial and Peijia Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stag Industrial position performs unexpectedly, Peijia Medical 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 Peijia Medical will offset losses from the drop in Peijia Medical's long position.| Stag Industrial vs. Apple Inc | Stag Industrial vs. Apple Inc | Stag Industrial vs. Apple Inc | Stag Industrial vs. Apple Inc |
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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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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