Correlation Between Australian Critical and National Storage
Can any of the company-specific risk be diversified away by investing in both Australian Critical and National Storage 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 Australian Critical and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Critical Minerals and National Storage REIT, you can compare the effects of market volatilities on Australian Critical and National Storage 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 Australian Critical with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Critical and National Storage.
Diversification Opportunities for Australian Critical and National Storage
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Australian and National is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Australian Critical Minerals and National Storage REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Storage REIT and Australian Critical 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 Australian Critical Minerals are associated (or correlated) with National Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Storage REIT has no effect on the direction of Australian Critical i.e., Australian Critical and National Storage go up and down completely randomly.
Pair Corralation between Australian Critical and National Storage
Assuming the 90 days trading horizon Australian Critical Minerals is expected to under-perform the National Storage. In addition to that, Australian Critical is 4.87 times more volatile than National Storage REIT. It trades about 0.0 of its total potential returns per unit of risk. National Storage REIT is currently generating about 0.03 per unit of volatility. If you would invest 220.00 in National Storage REIT on September 14, 2024 and sell it today you would earn a total of 16.00 from holding National Storage REIT or generate 7.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Australian Critical Minerals vs. National Storage REIT
Performance |
| Timeline |
| Australian Critical |
| National Storage REIT |
Australian Critical and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Critical and National Storage
The main advantage of trading using opposite Australian Critical and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Critical position performs unexpectedly, National Storage 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 National Storage will offset losses from the drop in National Storage's long position.| Australian Critical vs. Hotel Property Investments | Australian Critical vs. Data3 | Australian Critical vs. Diversified United Investment | Australian Critical vs. Auctus Alternative Investments |
| National Storage vs. Scentre Group | National Storage vs. Vicinity Centres Re | National Storage vs. Charter Hall Retail | National Storage vs. Cromwell Property Group |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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