Correlation Between National Storage and AmerisourceBergen
Can any of the company-specific risk be diversified away by investing in both National Storage and AmerisourceBergen 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 AmerisourceBergen 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 AmerisourceBergen, you can compare the effects of market volatilities on National Storage and AmerisourceBergen 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 AmerisourceBergen. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and AmerisourceBergen.
Diversification Opportunities for National Storage and AmerisourceBergen
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between National and AmerisourceBergen is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding National Storage Affiliates and AmerisourceBergen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AmerisourceBergen 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 AmerisourceBergen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AmerisourceBergen has no effect on the direction of National Storage i.e., National Storage and AmerisourceBergen go up and down completely randomly.
Pair Corralation between National Storage and AmerisourceBergen
Assuming the 90 days horizon National Storage is expected to generate 1.77 times less return on investment than AmerisourceBergen. In addition to that, National Storage is 1.5 times more volatile than AmerisourceBergen. It trades about 0.03 of its total potential returns per unit of risk. AmerisourceBergen is currently generating about 0.07 per unit of volatility. If you would invest 14,673 in AmerisourceBergen on October 7, 2024 and sell it today you would earn a total of 6,832 from holding AmerisourceBergen or generate 46.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Storage Affiliates vs. AmerisourceBergen
Performance |
| Timeline |
| National Storage Aff |
| AmerisourceBergen |
National Storage and AmerisourceBergen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and AmerisourceBergen
The main advantage of trading using opposite National Storage and AmerisourceBergen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, AmerisourceBergen 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 AmerisourceBergen will offset losses from the drop in AmerisourceBergen's long position.| National Storage vs. CubeSmart | National Storage vs. Montea Comm VA | National Storage vs. Superior Plus Corp | National Storage vs. NMI Holdings |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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