Correlation Between STAG Industrial, and United States

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

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

Diversification Opportunities for STAG Industrial, and United States

0.47

Correlation Coefficient

STAG Industrial,  United States

Very weak diversification

The 3 months correlation between STAG and United is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding STAG Industrial, and United States Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United States Steel 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 United States. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United States Steel has no effect on the direction of STAG Industrial, i.e., STAG Industrial, and United States go up and down completely randomly.

Pair Corralation between STAG Industrial, and United States

Assuming the 90 days trading horizon STAG Industrial, is expected to generate 2.43 times less return on investment than United States. But when comparing it to its historical volatility, STAG Industrial, is 1.87 times less risky than United States. It trades about 0.03 of its potential returns per unit of risk. United States Steel is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  14,268  in United States Steel on October 4, 2024 and sell it today you would earn a total of  5,721  from holding United States Steel or generate 40.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	92.67%
Values	Daily Returns

STAG Industrial,  vs.  United States Steel

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 newest stock price disturbance, may contribute to short-term losses for the investors.

United States Steel

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in United States Steel are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, United States may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with STAG Industrial, and United States

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

The idea behind STAG Industrial, and United States Steel 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.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.