Correlation Between Stag Industrial and Hitachi Construction
Can any of the company-specific risk be diversified away by investing in both Stag Industrial and Hitachi Construction 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 Hitachi Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stag Industrial and Hitachi Construction Machinery, you can compare the effects of market volatilities on Stag Industrial and Hitachi Construction 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 Hitachi Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stag Industrial and Hitachi Construction.
Diversification Opportunities for Stag Industrial and Hitachi Construction
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stag and Hitachi is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Stag Industrial and Hitachi Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hitachi Construction 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 Hitachi Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hitachi Construction has no effect on the direction of Stag Industrial i.e., Stag Industrial and Hitachi Construction go up and down completely randomly.
Pair Corralation between Stag Industrial and Hitachi Construction
Assuming the 90 days trading horizon Stag Industrial is expected to under-perform the Hitachi Construction. But the stock apears to be less risky and, when comparing its historical volatility, Stag Industrial is 1.34 times less risky than Hitachi Construction. The stock trades about -0.12 of its potential returns per unit of risk. The Hitachi Construction Machinery is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 2,100 in Hitachi Construction Machinery on October 30, 2024 and sell it today you would earn a total of 180.00 from holding Hitachi Construction Machinery or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stag Industrial vs. Hitachi Construction Machinery
Performance |
| Timeline |
| Stag Industrial |
| Hitachi Construction |
Stag Industrial and Hitachi Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stag Industrial and Hitachi Construction
The main advantage of trading using opposite Stag Industrial and Hitachi Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stag Industrial position performs unexpectedly, Hitachi Construction 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 Hitachi Construction will offset losses from the drop in Hitachi Construction's long position.| Stag Industrial vs. SENECA FOODS A | Stag Industrial vs. CODERE ONLINE LUX | Stag Industrial vs. THAI BEVERAGE | Stag Industrial vs. PATTIES FOODS |
| Hitachi Construction vs. Japan Medical Dynamic | Hitachi Construction vs. PEPTONIC MEDICAL | Hitachi Construction vs. NURAN WIRELESS INC | Hitachi Construction vs. KENEDIX OFFICE INV |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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