Correlation Between Stag Industrial and KBC GROEP

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

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

Diversification Opportunities for Stag Industrial and KBC GROEP

0.0

Correlation Coefficient

Stag Industrial  KBC GROEP

Pay attention - limited upside

The 3 months correlation between Stag and KBC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Stag Industrial and KBC GROEP NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KBC GROEP NV 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 KBC GROEP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KBC GROEP NV has no effect on the direction of Stag Industrial i.e., Stag Industrial and KBC GROEP go up and down completely randomly.

Pair Corralation between Stag Industrial and KBC GROEP

If you would invest  0.00  in KBC GROEP NV on October 9, 2024 and sell it today you would earn a total of  0.00  from holding KBC GROEP NV or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	6.25%
Values	Daily Returns

Stag Industrial  vs.  KBC GROEP NV

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. In spite of comparatively stable basic indicators, Stag Industrial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

KBC GROEP NV

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Stag Industrial and KBC GROEP

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

The idea behind Stag Industrial and KBC GROEP NV 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.