Correlation Between Stag Industrial and Gevo

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

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

Diversification Opportunities for Stag Industrial and Gevo

-0.15

Correlation Coefficient

Stag Industrial  Gevo

Good diversification

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

Pair Corralation between Stag Industrial and Gevo

Assuming the 90 days trading horizon Stag Industrial is expected to under-perform the Gevo. But the stock apears to be less risky and, when comparing its historical volatility, Stag Industrial is 6.47 times less risky than Gevo. The stock trades about -0.05 of its potential returns per unit of risk. The Gevo Inc is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  269.00  in Gevo Inc on October 23, 2024 and sell it today you would lose (59.00) from holding Gevo Inc or give up 21.93% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Stag Industrial  vs.  Gevo 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. 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.

Gevo Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gevo Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Gevo 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 Gevo

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

The idea behind Stag Industrial and Gevo 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 CEOs Directory module to screen CEOs from public companies around the world.