Correlation Between Stag Industrial and PG +

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

By analyzing existing cross correlation between Stag Industrial and PG E P6, you can compare the effects of market volatilities on Stag Industrial and PG + 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 PG +. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stag Industrial and PG +.

Diversification Opportunities for Stag Industrial and PG +

0.06

Correlation Coefficient

Stag Industrial  PG +

Significant diversification

The 3 months correlation between Stag and PCG6 is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Stag Industrial and PG E P6 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PG E P6 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 PG +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PG E P6 has no effect on the direction of Stag Industrial i.e., Stag Industrial and PG + go up and down completely randomly.

Pair Corralation between Stag Industrial and PG +

Assuming the 90 days trading horizon Stag Industrial is expected to under-perform the PG +. In addition to that, Stag Industrial is 1.01 times more volatile than PG E P6. It trades about -0.17 of its total potential returns per unit of risk. PG E P6 is currently generating about 0.08 per unit of volatility. If you would invest  2,140  in PG E P6 on October 7, 2024 and sell it today you would earn a total of  80.00  from holding PG E P6 or generate 3.74% 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.  PG E P6

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.

PG E P6

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in PG E P6 are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical and fundamental indicators, PG + 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 PG +

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

The idea behind Stag Industrial and PG E P6 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.