Correlation Between Stag Industrial and TAL Education
Can any of the company-specific risk be diversified away by investing in both Stag Industrial and TAL Education 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 TAL Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stag Industrial and TAL Education Group, you can compare the effects of market volatilities on Stag Industrial and TAL Education 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 TAL Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stag Industrial and TAL Education.
Diversification Opportunities for Stag Industrial and TAL Education
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Stag and TAL is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Stag Industrial and TAL Education Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAL Education Group 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 TAL Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAL Education Group has no effect on the direction of Stag Industrial i.e., Stag Industrial and TAL Education go up and down completely randomly.
Pair Corralation between Stag Industrial and TAL Education
Assuming the 90 days trading horizon Stag Industrial is expected to under-perform the TAL Education. But the stock apears to be less risky and, when comparing its historical volatility, Stag Industrial is 3.33 times less risky than TAL Education. The stock trades about -0.01 of its potential returns per unit of risk. The TAL Education Group is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 705.00 in TAL Education Group on November 3, 2024 and sell it today you would earn a total of 465.00 from holding TAL Education Group or generate 65.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stag Industrial vs. TAL Education Group
Performance |
| Timeline |
| Stag Industrial |
| TAL Education Group |
Stag Industrial and TAL Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stag Industrial and TAL Education
The main advantage of trading using opposite Stag Industrial and TAL Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stag Industrial position performs unexpectedly, TAL Education 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 TAL Education will offset losses from the drop in TAL Education's long position.| Stag Industrial vs. AEON STORES | Stag Industrial vs. FAST RETAIL ADR | Stag Industrial vs. Playa Hotels Resorts | Stag Industrial vs. USWE SPORTS AB |
| TAL Education vs. SIVERS SEMICONDUCTORS AB | TAL Education vs. NorAm Drilling AS | TAL Education vs. Volkswagen AG | TAL Education vs. Darden Restaurants |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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