Correlation Between STAG Industrial and Douglas Emmett
Can any of the company-specific risk be diversified away by investing in both STAG Industrial and Douglas Emmett 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 Douglas Emmett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STAG Industrial and Douglas Emmett, you can compare the effects of market volatilities on STAG Industrial and Douglas Emmett 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 Douglas Emmett. Check out your portfolio center. Please also check ongoing floating volatility patterns of STAG Industrial and Douglas Emmett.
Diversification Opportunities for STAG Industrial and Douglas Emmett
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STAG and Douglas is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding STAG Industrial and Douglas Emmett in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Douglas Emmett 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 Douglas Emmett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Douglas Emmett has no effect on the direction of STAG Industrial i.e., STAG Industrial and Douglas Emmett go up and down completely randomly.
Pair Corralation between STAG Industrial and Douglas Emmett
Given the investment horizon of 90 days STAG Industrial is expected to generate 0.69 times more return on investment than Douglas Emmett. However, STAG Industrial is 1.46 times less risky than Douglas Emmett. It trades about 0.13 of its potential returns per unit of risk. Douglas Emmett is currently generating about 0.03 per unit of risk. If you would invest 3,520 in STAG Industrial on March 14, 2025 and sell it today you would earn a total of 125.00 from holding STAG Industrial or generate 3.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STAG Industrial vs. Douglas Emmett
Performance |
| Timeline |
| STAG Industrial |
| Douglas Emmett |
STAG Industrial and Douglas Emmett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STAG Industrial and Douglas Emmett
The main advantage of trading using opposite STAG Industrial and Douglas Emmett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STAG Industrial position performs unexpectedly, Douglas Emmett 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 Douglas Emmett will offset losses from the drop in Douglas Emmett's long position.| STAG Industrial vs. Public Storage | STAG Industrial vs. Extra Space Storage | STAG Industrial vs. Rexford Industrial Realty | STAG Industrial vs. Innovative Industrial Properties |
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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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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