Correlation Between STAG Industrial and Twin Vee

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

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

Diversification Opportunities for STAG Industrial and Twin Vee

0.59

Correlation Coefficient

STAG Industrial  Twin Vee

Very weak diversification

The 3 months correlation between STAG and Twin is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding STAG Industrial and Twin Vee Powercats in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Twin Vee Powercats 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 Twin Vee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Twin Vee Powercats has no effect on the direction of STAG Industrial i.e., STAG Industrial and Twin Vee go up and down completely randomly.

Pair Corralation between STAG Industrial and Twin Vee

Given the investment horizon of 90 days STAG Industrial is expected to under-perform the Twin Vee. But the stock apears to be less risky and, when comparing its historical volatility, STAG Industrial is 5.47 times less risky than Twin Vee. The stock trades about -0.36 of its potential returns per unit of risk. The Twin Vee Powercats is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest  86.00  in Twin Vee Powercats on January 28, 2024 and sell it today you would lose (11.00) from holding Twin Vee Powercats or give up 12.79% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

STAG Industrial  vs.  Twin Vee Powercats

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 latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Twin Vee Powercats

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Twin Vee Powercats has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in May 2024. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with STAG Industrial and Twin Vee

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

The idea behind STAG Industrial and Twin Vee Powercats 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.