Correlation Between Alternative Investment and National Storage
Can any of the company-specific risk be diversified away by investing in both Alternative Investment 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 Alternative Investment and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alternative Investment Trust and National Storage REIT, you can compare the effects of market volatilities on Alternative Investment 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 Alternative Investment with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alternative Investment and National Storage.
Diversification Opportunities for Alternative Investment and National Storage
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Alternative and National is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Alternative Investment Trust 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 Alternative Investment 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 Alternative Investment Trust 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 Alternative Investment i.e., Alternative Investment and National Storage go up and down completely randomly.
Pair Corralation between Alternative Investment and National Storage
If you would invest 247.00 in National Storage REIT on August 28, 2024 and sell it today you would earn a total of 5.00 from holding National Storage REIT or generate 2.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alternative Investment Trust vs. National Storage REIT
Performance |
| Timeline |
| Alternative Investment |
| National Storage REIT |
Alternative Investment and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alternative Investment and National Storage
The main advantage of trading using opposite Alternative Investment and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alternative Investment 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.| Alternative Investment vs. National Australia Bank | Alternative Investment vs. National Australia Bank | Alternative Investment vs. Westpac Banking | Alternative Investment vs. National Australia Bank |
| 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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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