Correlation Between Amcor Plc and National Storage
Can any of the company-specific risk be diversified away by investing in both Amcor Plc and National Storage 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 Amcor Plc and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Amcor plc and National Storage Affiliates, you can compare the effects of market volatilities on Amcor Plc and National Storage 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 Amcor Plc with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Amcor Plc and National Storage.
Diversification Opportunities for Amcor Plc and National Storage
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Amcor and National is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Amcor plc and National Storage Affiliates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Storage Aff and Amcor Plc 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 Amcor plc are associated (or correlated) with National Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Storage Aff has no effect on the direction of Amcor Plc i.e., Amcor Plc and National Storage go up and down completely randomly.
Pair Corralation between Amcor Plc and National Storage
Assuming the 90 days horizon Amcor plc is expected to generate 1.99 times more return on investment than National Storage. However, Amcor Plc is 1.99 times more volatile than National Storage Affiliates. It trades about 0.03 of its potential returns per unit of risk. National Storage Affiliates is currently generating about 0.06 per unit of risk. If you would invest 922.00 in Amcor plc on September 14, 2024 and sell it today you would earn a total of 9.00 from holding Amcor plc or generate 0.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Amcor plc vs. National Storage Affiliates
Performance |
| Timeline |
| Amcor plc |
| National Storage Aff |
Amcor Plc and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Amcor Plc and National Storage
The main advantage of trading using opposite Amcor Plc and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Amcor Plc position performs unexpectedly, National Storage 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 National Storage will offset losses from the drop in National Storage's long position.| Amcor Plc vs. Tsingtao Brewery | Amcor Plc vs. SALESFORCE INC CDR | Amcor Plc vs. CARSALESCOM | Amcor Plc vs. Carsales |
| National Storage vs. Lifeway Foods | National Storage vs. TYSON FOODS A | National Storage vs. SENECA FOODS A | National Storage vs. MCEWEN MINING INC |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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