Correlation Between National Storage and GLADSTONE LAND
Can any of the company-specific risk be diversified away by investing in both National Storage and GLADSTONE LAND 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 GLADSTONE LAND 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 GLADSTONE LAND L 001, you can compare the effects of market volatilities on National Storage and GLADSTONE LAND 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 GLADSTONE LAND. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and GLADSTONE LAND.
Diversification Opportunities for National Storage and GLADSTONE LAND
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and GLADSTONE is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding National Storage Affiliates and GLADSTONE LAND L 001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLADSTONE LAND L 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 GLADSTONE LAND. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLADSTONE LAND L has no effect on the direction of National Storage i.e., National Storage and GLADSTONE LAND go up and down completely randomly.
Pair Corralation between National Storage and GLADSTONE LAND
Assuming the 90 days horizon National Storage Affiliates is expected to under-perform the GLADSTONE LAND. But the stock apears to be less risky and, when comparing its historical volatility, National Storage Affiliates is 1.62 times less risky than GLADSTONE LAND. The stock trades about -0.31 of its potential returns per unit of risk. The GLADSTONE LAND L 001 is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,037 in GLADSTONE LAND L 001 on October 20, 2024 and sell it today you would earn a total of 6.00 from holding GLADSTONE LAND L 001 or generate 0.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Storage Affiliates vs. GLADSTONE LAND L 001
Performance |
| Timeline |
| National Storage Aff |
| GLADSTONE LAND L |
National Storage and GLADSTONE LAND Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and GLADSTONE LAND
The main advantage of trading using opposite National Storage and GLADSTONE LAND positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, GLADSTONE LAND 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 GLADSTONE LAND will offset losses from the drop in GLADSTONE LAND's long position.| National Storage vs. Japan Tobacco | National Storage vs. Fukuyama Transporting Co | National Storage vs. COLUMBIA SPORTSWEAR | National Storage vs. Gaztransport Technigaz SA |
| GLADSTONE LAND vs. Indutrade AB | GLADSTONE LAND vs. CarsalesCom | GLADSTONE LAND vs. CEOTRONICS | GLADSTONE LAND vs. Canon Marketing Japan |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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