Correlation Between National Storage and Stewart Information
Can any of the company-specific risk be diversified away by investing in both National Storage and Stewart Information 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 Stewart Information 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 Stewart Information Services, you can compare the effects of market volatilities on National Storage and Stewart Information 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 Stewart Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and Stewart Information.
Diversification Opportunities for National Storage and Stewart Information
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and Stewart is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding National Storage Affiliates and Stewart Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stewart Information 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 Stewart Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stewart Information has no effect on the direction of National Storage i.e., National Storage and Stewart Information go up and down completely randomly.
Pair Corralation between National Storage and Stewart Information
Assuming the 90 days horizon National Storage is expected to generate 1.72 times less return on investment than Stewart Information. But when comparing it to its historical volatility, National Storage Affiliates is 1.1 times less risky than Stewart Information. It trades about 0.1 of its potential returns per unit of risk. Stewart Information Services is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 6,200 in Stewart Information Services on August 25, 2024 and sell it today you would earn a total of 450.00 from holding Stewart Information Services or generate 7.26% 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. Stewart Information Services
Performance |
| Timeline |
| National Storage Aff |
| Stewart Information |
National Storage and Stewart Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and Stewart Information
The main advantage of trading using opposite National Storage and Stewart Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, Stewart Information 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 Stewart Information will offset losses from the drop in Stewart Information's long position.| National Storage vs. Superior Plus Corp | National Storage vs. Origin Agritech | National Storage vs. Identiv | National Storage vs. INTUITIVE SURGICAL |
| Stewart Information vs. QBE Insurance Group | Stewart Information vs. Insurance Australia Group | Stewart Information vs. Superior Plus Corp | Stewart Information vs. NMI Holdings |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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