Correlation Between National Storage and Southern Copper
Can any of the company-specific risk be diversified away by investing in both National Storage and Southern Copper 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 Southern Copper 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 Southern Copper, you can compare the effects of market volatilities on National Storage and Southern Copper 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 Southern Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and Southern Copper.
Diversification Opportunities for National Storage and Southern Copper
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Southern is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding National Storage Affiliates and Southern Copper in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Copper 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 Southern Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Copper has no effect on the direction of National Storage i.e., National Storage and Southern Copper go up and down completely randomly.
Pair Corralation between National Storage and Southern Copper
Assuming the 90 days horizon National Storage Affiliates is expected to generate 0.64 times more return on investment than Southern Copper. However, National Storage Affiliates is 1.56 times less risky than Southern Copper. It trades about 0.04 of its potential returns per unit of risk. Southern Copper is currently generating about 0.02 per unit of risk. If you would invest 3,698 in National Storage Affiliates on September 14, 2024 and sell it today you would earn a total of 232.00 from holding National Storage Affiliates or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Storage Affiliates vs. Southern Copper
Performance |
| Timeline |
| National Storage Aff |
| Southern Copper |
National Storage and Southern Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and Southern Copper
The main advantage of trading using opposite National Storage and Southern Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, Southern Copper 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 Southern Copper will offset losses from the drop in Southern Copper's long position.| National Storage vs. Extra Space Storage | National Storage vs. REXFORD INDREALTY DL 01 | National Storage vs. CubeSmart | National Storage vs. First Industrial Realty |
| Southern Copper vs. Superior Plus Corp | Southern Copper vs. NMI Holdings | Southern Copper vs. SIVERS SEMICONDUCTORS AB | Southern Copper vs. NorAm Drilling AS |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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