Correlation Between Aurelia Metals and National Storage
Can any of the company-specific risk be diversified away by investing in both Aurelia Metals 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 Aurelia Metals and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aurelia Metals and National Storage REIT, you can compare the effects of market volatilities on Aurelia Metals 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 Aurelia Metals with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aurelia Metals and National Storage.
Diversification Opportunities for Aurelia Metals and National Storage
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Aurelia and National is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Aurelia Metals 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 Aurelia Metals 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 Aurelia Metals 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 Aurelia Metals i.e., Aurelia Metals and National Storage go up and down completely randomly.
Pair Corralation between Aurelia Metals and National Storage
Assuming the 90 days trading horizon Aurelia Metals is expected to under-perform the National Storage. In addition to that, Aurelia Metals is 4.16 times more volatile than National Storage REIT. It trades about -0.04 of its total potential returns per unit of risk. National Storage REIT is currently generating about 0.12 per unit of volatility. If you would invest 247.00 in National Storage REIT on August 29, 2024 and sell it today you would earn a total of 6.00 from holding National Storage REIT or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aurelia Metals vs. National Storage REIT
Performance |
| Timeline |
| Aurelia Metals |
| National Storage REIT |
Aurelia Metals and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aurelia Metals and National Storage
The main advantage of trading using opposite Aurelia Metals and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aurelia Metals 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.| Aurelia Metals vs. Aristocrat Leisure | Aurelia Metals vs. Genetic Technologies | Aurelia Metals vs. Thorney Technologies | Aurelia Metals vs. Ras Technology Holdings |
| 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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