Correlation Between Stag Industrial and Flowers Foods
Can any of the company-specific risk be diversified away by investing in both Stag Industrial and Flowers Foods 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 Flowers Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stag Industrial and Flowers Foods, you can compare the effects of market volatilities on Stag Industrial and Flowers Foods 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 Flowers Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stag Industrial and Flowers Foods.
Diversification Opportunities for Stag Industrial and Flowers Foods
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stag and Flowers is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Stag Industrial and Flowers Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flowers Foods 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 Flowers Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flowers Foods has no effect on the direction of Stag Industrial i.e., Stag Industrial and Flowers Foods go up and down completely randomly.
Pair Corralation between Stag Industrial and Flowers Foods
Assuming the 90 days trading horizon Stag Industrial is expected to generate 1.12 times more return on investment than Flowers Foods. However, Stag Industrial is 1.12 times more volatile than Flowers Foods. It trades about 0.02 of its potential returns per unit of risk. Flowers Foods is currently generating about -0.01 per unit of risk. If you would invest 2,953 in Stag Industrial on October 16, 2024 and sell it today you would earn a total of 248.00 from holding Stag Industrial or generate 8.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stag Industrial vs. Flowers Foods
Performance |
| Timeline |
| Stag Industrial |
| Flowers Foods |
Stag Industrial and Flowers Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stag Industrial and Flowers Foods
The main advantage of trading using opposite Stag Industrial and Flowers Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stag Industrial position performs unexpectedly, Flowers Foods 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 Flowers Foods will offset losses from the drop in Flowers Foods' long position.| Stag Industrial vs. Hisense Home Appliances | Stag Industrial vs. Urban Outfitters | Stag Industrial vs. KENEDIX OFFICE INV | Stag Industrial vs. MCEWEN MINING INC |
| Flowers Foods vs. MAGNUM MINING EXP | Flowers Foods vs. ARDAGH METAL PACDL 0001 | Flowers Foods vs. Stag Industrial | Flowers Foods vs. MCEWEN MINING INC |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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