Correlation Between Stag Industrial and CSL
Can any of the company-specific risk be diversified away by investing in both Stag Industrial and CSL 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 CSL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stag Industrial and CSL Limited, you can compare the effects of market volatilities on Stag Industrial and CSL 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 CSL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stag Industrial and CSL.
Diversification Opportunities for Stag Industrial and CSL
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stag and CSL is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Stag Industrial and CSL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSL Limited 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 CSL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSL Limited has no effect on the direction of Stag Industrial i.e., Stag Industrial and CSL go up and down completely randomly.
Pair Corralation between Stag Industrial and CSL
Assuming the 90 days trading horizon Stag Industrial is expected to generate 1.07 times more return on investment than CSL. However, Stag Industrial is 1.07 times more volatile than CSL Limited. It trades about 0.02 of its potential returns per unit of risk. CSL Limited is currently generating about -0.01 per unit of risk. If you would invest 2,987 in Stag Industrial on November 7, 2024 and sell it today you would earn a total of 329.00 from holding Stag Industrial or generate 11.01% 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. CSL Limited
Performance |
| Timeline |
| Stag Industrial |
| CSL Limited |
Stag Industrial and CSL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stag Industrial and CSL
The main advantage of trading using opposite Stag Industrial and CSL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stag Industrial position performs unexpectedly, CSL 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 CSL will offset losses from the drop in CSL's long position.| Stag Industrial vs. SALESFORCE INC CDR | Stag Industrial vs. GWILLI FOOD | Stag Industrial vs. PATTIES FOODS | Stag Industrial vs. Gruppo Mutuionline SpA |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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