Correlation Between National Storage and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both National Storage and Sunny Optical 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 Sunny Optical 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 Sunny Optical Technology, you can compare the effects of market volatilities on National Storage and Sunny Optical 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 Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and Sunny Optical.
Diversification Opportunities for National Storage and Sunny Optical
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and Sunny is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding National Storage Affiliates and Sunny Optical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Optical Technology 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 Sunny Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Optical Technology has no effect on the direction of National Storage i.e., National Storage and Sunny Optical go up and down completely randomly.
Pair Corralation between National Storage and Sunny Optical
Assuming the 90 days horizon National Storage Affiliates is expected to under-perform the Sunny Optical. But the stock apears to be less risky and, when comparing its historical volatility, National Storage Affiliates is 2.31 times less risky than Sunny Optical. The stock trades about -0.01 of its potential returns per unit of risk. The Sunny Optical Technology is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 505.00 in Sunny Optical Technology on September 12, 2024 and sell it today you would earn a total of 302.00 from holding Sunny Optical Technology or generate 59.8% 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. Sunny Optical Technology
Performance |
| Timeline |
| National Storage Aff |
| Sunny Optical Technology |
National Storage and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and Sunny Optical
The main advantage of trading using opposite National Storage and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, Sunny Optical 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 Sunny Optical will offset losses from the drop in Sunny Optical's long position.| National Storage vs. FANDIFI TECHNOLOGY P | National Storage vs. Micron Technology | National Storage vs. DXC Technology Co | National Storage vs. HEALTHCARE REAL A |
| Sunny Optical vs. Hubbell Incorporated | Sunny Optical vs. TDK Corporation | Sunny Optical vs. Superior Plus Corp | Sunny Optical vs. SIVERS SEMICONDUCTORS AB |
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 Correlations module to find global opportunities by holding instruments from different markets.
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