Correlation Between National Storage and Grand City
Can any of the company-specific risk be diversified away by investing in both National Storage and Grand City 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 Grand City 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 Grand City Properties, you can compare the effects of market volatilities on National Storage and Grand City 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 Grand City. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and Grand City.
Diversification Opportunities for National Storage and Grand City
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between National and Grand is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding National Storage Affiliates and Grand City Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Grand City Properties 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 Grand City. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Grand City Properties has no effect on the direction of National Storage i.e., National Storage and Grand City go up and down completely randomly.
Pair Corralation between National Storage and Grand City
Assuming the 90 days horizon National Storage Affiliates is expected to generate 1.21 times more return on investment than Grand City. However, National Storage is 1.21 times more volatile than Grand City Properties. It trades about 0.18 of its potential returns per unit of risk. Grand City Properties is currently generating about 0.01 per unit of risk. If you would invest 3,961 in National Storage Affiliates on August 30, 2024 and sell it today you would earn a total of 317.00 from holding National Storage Affiliates or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
National Storage Affiliates vs. Grand City Properties
Performance |
| Timeline |
| National Storage Aff |
| Grand City Properties |
National Storage and Grand City Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and Grand City
The main advantage of trading using opposite National Storage and Grand City positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, Grand City 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 Grand City will offset losses from the drop in Grand City's long position.| National Storage vs. CubeSmart | National Storage vs. Superior Plus Corp | National Storage vs. SIVERS SEMICONDUCTORS AB | National Storage vs. Talanx AG |
| Grand City vs. CAREER EDUCATION | Grand City vs. DEVRY EDUCATION GRP | Grand City vs. Vastned Retail NV | Grand City vs. Marie Brizard Wine |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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