Correlation Between National Storage and Superior Plus
Can any of the company-specific risk be diversified away by investing in both National Storage and Superior Plus 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 Superior Plus 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 Superior Plus Corp, you can compare the effects of market volatilities on National Storage and Superior Plus 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 Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and Superior Plus.
Diversification Opportunities for National Storage and Superior Plus
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Superior is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding National Storage Affiliates and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp 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 Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of National Storage i.e., National Storage and Superior Plus go up and down completely randomly.
Pair Corralation between National Storage and Superior Plus
Assuming the 90 days horizon National Storage Affiliates is expected to generate 0.41 times more return on investment than Superior Plus. However, National Storage Affiliates is 2.46 times less risky than Superior Plus. It trades about 0.1 of its potential returns per unit of risk. Superior Plus Corp is currently generating about -0.04 per unit of risk. If you would invest 3,997 in National Storage Affiliates on August 25, 2024 and sell it today you would earn a total of 161.00 from holding National Storage Affiliates or generate 4.03% 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. Superior Plus Corp
Performance |
| Timeline |
| National Storage Aff |
| Superior Plus Corp |
National Storage and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and Superior Plus
The main advantage of trading using opposite National Storage and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| National Storage vs. Superior Plus Corp | National Storage vs. Origin Agritech | National Storage vs. Identiv | National Storage vs. INTUITIVE SURGICAL |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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