Correlation Between CHINA SOUTHN and Stag Industrial
Can any of the company-specific risk be diversified away by investing in both CHINA SOUTHN and Stag Industrial 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 CHINA SOUTHN and Stag Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA SOUTHN AIR H and Stag Industrial, you can compare the effects of market volatilities on CHINA SOUTHN and Stag Industrial 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 CHINA SOUTHN with a short position of Stag Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA SOUTHN and Stag Industrial.
Diversification Opportunities for CHINA SOUTHN and Stag Industrial
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CHINA and Stag is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding CHINA SOUTHN AIR H and Stag Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stag Industrial and CHINA SOUTHN 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 CHINA SOUTHN AIR H are associated (or correlated) with Stag Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stag Industrial has no effect on the direction of CHINA SOUTHN i.e., CHINA SOUTHN and Stag Industrial go up and down completely randomly.
Pair Corralation between CHINA SOUTHN and Stag Industrial
Assuming the 90 days trading horizon CHINA SOUTHN AIR H is expected to generate 2.12 times more return on investment than Stag Industrial. However, CHINA SOUTHN is 2.12 times more volatile than Stag Industrial. It trades about 0.01 of its potential returns per unit of risk. Stag Industrial is currently generating about -0.15 per unit of risk. If you would invest 49.00 in CHINA SOUTHN AIR H on October 17, 2024 and sell it today you would earn a total of 0.00 from holding CHINA SOUTHN AIR H or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
CHINA SOUTHN AIR H vs. Stag Industrial
Performance |
| Timeline |
| CHINA SOUTHN AIR |
| Stag Industrial |
CHINA SOUTHN and Stag Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA SOUTHN and Stag Industrial
The main advantage of trading using opposite CHINA SOUTHN and Stag Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA SOUTHN position performs unexpectedly, Stag Industrial 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 Stag Industrial will offset losses from the drop in Stag Industrial's long position.| CHINA SOUTHN vs. Vulcan Materials | CHINA SOUTHN vs. Summit Materials | CHINA SOUTHN vs. ARROW ELECTRONICS | CHINA SOUTHN vs. Arrow Electronics |
| Stag Industrial vs. SEALED AIR | Stag Industrial vs. Lery Seafood Group | Stag Industrial vs. WIZZ AIR HLDGUNSPADR4 | Stag Industrial vs. CHINA SOUTHN AIR H |
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 Stocks Directory module to find actively traded stocks across global markets.
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