Correlation Between STAG Industrial, and Airbnb

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

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

Diversification Opportunities for STAG Industrial, and Airbnb

0.15

Correlation Coefficient

STAG Industrial,  Airbnb

Average diversification

The 3 months correlation between STAG and Airbnb is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding STAG Industrial, and Airbnb Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Airbnb Inc 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 Airbnb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Airbnb Inc has no effect on the direction of STAG Industrial, i.e., STAG Industrial, and Airbnb go up and down completely randomly.

Pair Corralation between STAG Industrial, and Airbnb

Assuming the 90 days trading horizon STAG Industrial, is expected to under-perform the Airbnb. But the stock apears to be less risky and, when comparing its historical volatility, STAG Industrial, is 1.57 times less risky than Airbnb. The stock trades about -0.04 of its potential returns per unit of risk. The Airbnb Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  3,872  in Airbnb Inc on October 26, 2024 and sell it today you would earn a total of  56.00  from holding Airbnb Inc or generate 1.45% 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.  Airbnb Inc

STAG Industrial,

Risk-Adjusted Performance

0 of 100

Very Weak

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

Airbnb Inc

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Airbnb Inc are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Airbnb is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with STAG Industrial, and Airbnb

The main advantage of trading using opposite STAG Industrial, and Airbnb positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STAG Industrial, position performs unexpectedly, Airbnb 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 Airbnb will offset losses from the drop in Airbnb's long position.

The idea behind STAG Industrial, and Airbnb Inc 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 Stocks Directory module to find actively traded stocks across global markets.