Correlation Between Stag Industrial and ALLEGROEU
Can any of the company-specific risk be diversified away by investing in both Stag Industrial and ALLEGROEU 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 ALLEGROEU into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stag Industrial and ALLEGROEU ZY 01, you can compare the effects of market volatilities on Stag Industrial and ALLEGROEU 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 ALLEGROEU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stag Industrial and ALLEGROEU.
Diversification Opportunities for Stag Industrial and ALLEGROEU
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Stag and ALLEGROEU is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Stag Industrial and ALLEGROEU ZY 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLEGROEU ZY 01 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 ALLEGROEU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLEGROEU ZY 01 has no effect on the direction of Stag Industrial i.e., Stag Industrial and ALLEGROEU go up and down completely randomly.
Pair Corralation between Stag Industrial and ALLEGROEU
Assuming the 90 days trading horizon Stag Industrial is expected to generate 0.71 times more return on investment than ALLEGROEU. However, Stag Industrial is 1.41 times less risky than ALLEGROEU. It trades about 0.11 of its potential returns per unit of risk. ALLEGROEU ZY 01 is currently generating about -0.1 per unit of risk. If you would invest 3,249 in Stag Industrial on October 25, 2024 and sell it today you would earn a total of 63.00 from holding Stag Industrial or generate 1.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
Stag Industrial vs. ALLEGROEU ZY 01
Performance |
| Timeline |
| Stag Industrial |
| ALLEGROEU ZY 01 |
Stag Industrial and ALLEGROEU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stag Industrial and ALLEGROEU
The main advantage of trading using opposite Stag Industrial and ALLEGROEU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stag Industrial position performs unexpectedly, ALLEGROEU 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 ALLEGROEU will offset losses from the drop in ALLEGROEU's long position.| Stag Industrial vs. Apple Inc | Stag Industrial vs. Apple Inc | Stag Industrial vs. Apple Inc | Stag Industrial vs. Apple Inc |
| ALLEGROEU vs. CHINA EDUCATION GROUP | ALLEGROEU vs. THAI BEVERAGE | ALLEGROEU vs. IDP EDUCATION LTD | ALLEGROEU vs. Tsingtao Brewery |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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