Correlation Between Argo Investments and National Storage
Can any of the company-specific risk be diversified away by investing in both Argo Investments 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 Argo Investments and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argo Investments and National Storage REIT, you can compare the effects of market volatilities on Argo Investments 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 Argo Investments with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argo Investments and National Storage.
Diversification Opportunities for Argo Investments and National Storage
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Argo and National is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Argo Investments 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 Argo Investments 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 Argo Investments 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 Argo Investments i.e., Argo Investments and National Storage go up and down completely randomly.
Pair Corralation between Argo Investments and National Storage
Assuming the 90 days trading horizon Argo Investments is expected to generate 0.59 times more return on investment than National Storage. However, Argo Investments is 1.69 times less risky than National Storage. It trades about 0.36 of its potential returns per unit of risk. National Storage REIT is currently generating about 0.06 per unit of risk. If you would invest 881.00 in Argo Investments on August 31, 2024 and sell it today you would earn a total of 40.00 from holding Argo Investments or generate 4.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Argo Investments vs. National Storage REIT
Performance |
| Timeline |
| Argo Investments |
| National Storage REIT |
Argo Investments and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Argo Investments and National Storage
The main advantage of trading using opposite Argo Investments and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argo Investments 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.| Argo Investments vs. Energy Resources | Argo Investments vs. 88 Energy | Argo Investments vs. Amani Gold | Argo Investments vs. A1 Investments Resources |
| National Storage vs. Scentre Group | National Storage vs. Charter Hall Retail | National Storage vs. Ecofibre | National Storage vs. iShares Global Healthcare |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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