Correlation Between Prologis and STAG Industrial

Can any of the company-specific risk be diversified away by investing in both Prologis 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 Prologis and STAG Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Prologis and STAG Industrial, you can compare the effects of market volatilities on Prologis 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 Prologis with a short position of STAG Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prologis and STAG Industrial.

Diversification Opportunities for Prologis and STAG Industrial

0.0

Correlation Coefficient

Prologis  STAG Industrial

Pay attention - limited upside

The 3 months correlation between Prologis and STAG is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Prologis and STAG Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAG Industrial and Prologis 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 Prologis 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 Prologis i.e., Prologis and STAG Industrial go up and down completely randomly.

Pair Corralation between Prologis and STAG Industrial

If you would invest  10,002  in Prologis on December 27, 2024 and sell it today you would earn a total of  286.00  from holding Prologis or generate 2.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Prologis  vs.  STAG Industrial

Prologis

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Prologis are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable forward-looking indicators, Prologis is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

STAG Industrial

Risk-Adjusted Performance

Very Weak

Over the last 90 days STAG Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, STAG Industrial is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Prologis and STAG Industrial

The main advantage of trading using opposite Prologis and STAG Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prologis 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.

The idea behind Prologis and STAG Industrial pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.