Correlation Between National Storage and Greencoat
Can any of the company-specific risk be diversified away by investing in both National Storage and Greencoat 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 National Storage and Greencoat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Storage Affiliates and Greencoat UK Wind, you can compare the effects of market volatilities on National Storage and Greencoat 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 National Storage with a short position of Greencoat. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and Greencoat.
Diversification Opportunities for National Storage and Greencoat
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between National and Greencoat is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding National Storage Affiliates and Greencoat UK Wind in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greencoat UK Wind and National Storage 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 National Storage Affiliates are associated (or correlated) with Greencoat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greencoat UK Wind has no effect on the direction of National Storage i.e., National Storage and Greencoat go up and down completely randomly.
Pair Corralation between National Storage and Greencoat
Assuming the 90 days horizon National Storage Affiliates is expected to generate 0.39 times more return on investment than Greencoat. However, National Storage Affiliates is 2.55 times less risky than Greencoat. It trades about 0.05 of its potential returns per unit of risk. Greencoat UK Wind is currently generating about 0.01 per unit of risk. If you would invest 4,042 in National Storage Affiliates on September 13, 2024 and sell it today you would earn a total of 49.00 from holding National Storage Affiliates or generate 1.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Storage Affiliates vs. Greencoat UK Wind
Performance |
| Timeline |
| National Storage Aff |
| Greencoat UK Wind |
National Storage and Greencoat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and Greencoat
The main advantage of trading using opposite National Storage and Greencoat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, Greencoat 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 Greencoat will offset losses from the drop in Greencoat's long position.| National Storage vs. Extra Space Storage | National Storage vs. REXFORD INDREALTY DL 01 | National Storage vs. CubeSmart | National Storage vs. First Industrial Realty |
| Greencoat vs. Grupo Carso SAB | Greencoat vs. Chesapeake Utilities | Greencoat vs. Geely Automobile Holdings | Greencoat vs. Cars 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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