Correlation Between National Storage and Highlight Communications
Can any of the company-specific risk be diversified away by investing in both National Storage and Highlight Communications 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 Highlight Communications 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 Highlight Communications AG, you can compare the effects of market volatilities on National Storage and Highlight Communications 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 Highlight Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and Highlight Communications.
Diversification Opportunities for National Storage and Highlight Communications
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Highlight is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding National Storage Affiliates and Highlight Communications AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highlight Communications 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 Highlight Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highlight Communications has no effect on the direction of National Storage i.e., National Storage and Highlight Communications go up and down completely randomly.
Pair Corralation between National Storage and Highlight Communications
Assuming the 90 days horizon National Storage Affiliates is expected to generate 0.62 times more return on investment than Highlight Communications. However, National Storage Affiliates is 1.6 times less risky than Highlight Communications. It trades about 0.04 of its potential returns per unit of risk. Highlight Communications AG is currently generating about -0.11 per unit of risk. If you would invest 3,462 in National Storage Affiliates on September 14, 2024 and sell it today you would earn a total of 574.00 from holding National Storage Affiliates or generate 16.58% 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. Highlight Communications AG
Performance |
| Timeline |
| National Storage Aff |
| Highlight Communications |
National Storage and Highlight Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and Highlight Communications
The main advantage of trading using opposite National Storage and Highlight Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, Highlight Communications 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 Highlight Communications will offset losses from the drop in Highlight Communications' long position.| National Storage vs. Lifeway Foods | National Storage vs. TYSON FOODS A | National Storage vs. SENECA FOODS A | National Storage vs. MCEWEN MINING INC |
| Highlight Communications vs. The Walt Disney | Highlight Communications vs. Charter Communications | Highlight Communications vs. Warner Music Group | Highlight Communications vs. Superior Plus Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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