Correlation Between National Storage and LIFENET INSURANCE
Can any of the company-specific risk be diversified away by investing in both National Storage and LIFENET INSURANCE 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 LIFENET INSURANCE 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 LIFENET INSURANCE CO, you can compare the effects of market volatilities on National Storage and LIFENET INSURANCE 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 LIFENET INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and LIFENET INSURANCE.
Diversification Opportunities for National Storage and LIFENET INSURANCE
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between National and LIFENET is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding National Storage Affiliates and LIFENET INSURANCE CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFENET INSURANCE 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 LIFENET INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFENET INSURANCE has no effect on the direction of National Storage i.e., National Storage and LIFENET INSURANCE go up and down completely randomly.
Pair Corralation between National Storage and LIFENET INSURANCE
Assuming the 90 days horizon National Storage is expected to generate 2.35 times less return on investment than LIFENET INSURANCE. In addition to that, National Storage is 1.28 times more volatile than LIFENET INSURANCE CO. It trades about 0.08 of its total potential returns per unit of risk. LIFENET INSURANCE CO is currently generating about 0.24 per unit of volatility. If you would invest 1,110 in LIFENET INSURANCE CO on August 25, 2024 and sell it today you would earn a total of 100.00 from holding LIFENET INSURANCE CO or generate 9.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Storage Affiliates vs. LIFENET INSURANCE CO
Performance |
| Timeline |
| National Storage Aff |
| LIFENET INSURANCE |
National Storage and LIFENET INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and LIFENET INSURANCE
The main advantage of trading using opposite National Storage and LIFENET INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, LIFENET INSURANCE 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 LIFENET INSURANCE will offset losses from the drop in LIFENET INSURANCE's long position.| National Storage vs. Superior Plus Corp | National Storage vs. Origin Agritech | National Storage vs. Identiv | National Storage vs. INTUITIVE SURGICAL |
| LIFENET INSURANCE vs. Lyxor 1 | LIFENET INSURANCE vs. Xtrackers ShortDAX | LIFENET INSURANCE vs. Xtrackers LevDAX |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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