Correlation Between Stag Industrial and DALATA HOTEL
Can any of the company-specific risk be diversified away by investing in both Stag Industrial and DALATA HOTEL 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 DALATA HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stag Industrial and DALATA HOTEL, you can compare the effects of market volatilities on Stag Industrial and DALATA HOTEL 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 DALATA HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stag Industrial and DALATA HOTEL.
Diversification Opportunities for Stag Industrial and DALATA HOTEL
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stag and DALATA is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Stag Industrial and DALATA HOTEL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DALATA HOTEL 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 DALATA HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DALATA HOTEL has no effect on the direction of Stag Industrial i.e., Stag Industrial and DALATA HOTEL go up and down completely randomly.
Pair Corralation between Stag Industrial and DALATA HOTEL
Assuming the 90 days trading horizon Stag Industrial is expected to generate 1.28 times less return on investment than DALATA HOTEL. But when comparing it to its historical volatility, Stag Industrial is 2.35 times less risky than DALATA HOTEL. It trades about 0.14 of its potential returns per unit of risk. DALATA HOTEL is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 424.00 in DALATA HOTEL on November 7, 2024 and sell it today you would earn a total of 14.00 from holding DALATA HOTEL or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stag Industrial vs. DALATA HOTEL
Performance |
| Timeline |
| Stag Industrial |
| DALATA HOTEL |
Stag Industrial and DALATA HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stag Industrial and DALATA HOTEL
The main advantage of trading using opposite Stag Industrial and DALATA HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stag Industrial position performs unexpectedly, DALATA HOTEL 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 DALATA HOTEL will offset losses from the drop in DALATA HOTEL's long position.| Stag Industrial vs. SIVERS SEMICONDUCTORS AB | Stag Industrial vs. NorAm Drilling AS | Stag Industrial vs. Volkswagen AG | Stag Industrial vs. Darden Restaurants |
| DALATA HOTEL vs. AIR LIQUIDE ADR | DALATA HOTEL vs. Westinghouse Air Brake | DALATA HOTEL vs. CompuGroup Medical SE | DALATA HOTEL vs. Peijia Medical Limited |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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