Correlation Between Gaming Leisure and STAG Industrial

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

By analyzing existing cross correlation between Gaming Leisure Properties and STAG Industrial, you can compare the effects of market volatilities on Gaming Leisure and STAG Industrial 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 Gaming Leisure with a short position of STAG Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaming Leisure and STAG Industrial.

Diversification Opportunities for Gaming Leisure and STAG Industrial

0.37

Correlation Coefficient

Gaming Leisure  STAG Industrial

Weak diversification

The 3 months correlation between Gaming and STAG is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Gaming Leisure Properties and STAG Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAG Industrial and Gaming Leisure 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 Gaming Leisure Properties are associated (or correlated) with STAG Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STAG Industrial has no effect on the direction of Gaming Leisure i.e., Gaming Leisure and STAG Industrial go up and down completely randomly.

Pair Corralation between Gaming Leisure and STAG Industrial

Given the investment horizon of 90 days Gaming Leisure is expected to generate 2.32 times less return on investment than STAG Industrial. But when comparing it to its historical volatility, Gaming Leisure Properties is 1.31 times less risky than STAG Industrial. It trades about 0.03 of its potential returns per unit of risk. STAG Industrial is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  3,333  in STAG Industrial on May 5, 2025 and sell it today you would earn a total of  106.00  from holding STAG Industrial or generate 3.18% return on investment over 90 days.

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

Gaming Leisure Properties  vs.  STAG Industrial

Gaming Leisure Properties

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gaming Leisure Properties are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Gaming Leisure is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

STAG Industrial

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in STAG Industrial are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, STAG Industrial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Gaming Leisure and STAG Industrial

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

The idea behind Gaming Leisure Properties and STAG Industrial 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.