Correlation Between National Storage and US Bancorp
Can any of the company-specific risk be diversified away by investing in both National Storage and US Bancorp 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 US Bancorp 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 US Bancorp, you can compare the effects of market volatilities on National Storage and US Bancorp 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 US Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and US Bancorp.
Diversification Opportunities for National Storage and US Bancorp
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and UB5 is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding National Storage Affiliates and US Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp 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 US Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Bancorp has no effect on the direction of National Storage i.e., National Storage and US Bancorp go up and down completely randomly.
Pair Corralation between National Storage and US Bancorp
Assuming the 90 days horizon National Storage is expected to generate 1.17 times less return on investment than US Bancorp. But when comparing it to its historical volatility, National Storage Affiliates is 1.21 times less risky than US Bancorp. It trades about 0.04 of its potential returns per unit of risk. US Bancorp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 3,626 in US Bancorp on September 14, 2024 and sell it today you would earn a total of 1,264 from holding US Bancorp or generate 34.86% 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. US Bancorp
Performance |
| Timeline |
| National Storage Aff |
| US Bancorp |
National Storage and US Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and US Bancorp
The main advantage of trading using opposite National Storage and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, US Bancorp 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 US Bancorp will offset losses from the drop in US Bancorp's 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 |
| US Bancorp vs. CHIBA BANK | US Bancorp vs. OAKTRSPECLENDNEW | US Bancorp vs. National Storage Affiliates | US Bancorp vs. Tradegate AG Wertpapierhandelsbank |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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