Correlation Between National Storage and SBI Insurance
Can any of the company-specific risk be diversified away by investing in both National Storage and SBI 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 SBI 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 SBI Insurance Group, you can compare the effects of market volatilities on National Storage and SBI 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 SBI Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and SBI Insurance.
Diversification Opportunities for National Storage and SBI Insurance
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between National and SBI is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding National Storage Affiliates and SBI Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Insurance Group 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 SBI Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Insurance Group has no effect on the direction of National Storage i.e., National Storage and SBI Insurance go up and down completely randomly.
Pair Corralation between National Storage and SBI Insurance
Assuming the 90 days horizon National Storage is expected to generate 1.19 times less return on investment than SBI Insurance. In addition to that, National Storage is 1.47 times more volatile than SBI Insurance Group. It trades about 0.18 of its total potential returns per unit of risk. SBI Insurance Group is currently generating about 0.31 per unit of volatility. If you would invest 545.00 in SBI Insurance Group on August 29, 2024 and sell it today you would earn a total of 55.00 from holding SBI Insurance Group or generate 10.09% 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. SBI Insurance Group
Performance |
| Timeline |
| National Storage Aff |
| SBI Insurance Group |
National Storage and SBI Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and SBI Insurance
The main advantage of trading using opposite National Storage and SBI Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, SBI 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 SBI Insurance will offset losses from the drop in SBI Insurance's long position.| National Storage vs. CubeSmart | National Storage vs. Superior Plus Corp | National Storage vs. SIVERS SEMICONDUCTORS AB | National Storage vs. Talanx AG |
| SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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