Correlation Between DATANG INTL and National Storage
Can any of the company-specific risk be diversified away by investing in both DATANG INTL 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 DATANG INTL and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DATANG INTL POW and National Storage Affiliates, you can compare the effects of market volatilities on DATANG INTL 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 DATANG INTL with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of DATANG INTL and National Storage.
Diversification Opportunities for DATANG INTL and National Storage
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DATANG and National is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding DATANG INTL POW and National Storage Affiliates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Storage Aff and DATANG INTL 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 DATANG INTL POW 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 Aff has no effect on the direction of DATANG INTL i.e., DATANG INTL and National Storage go up and down completely randomly.
Pair Corralation between DATANG INTL and National Storage
Assuming the 90 days trading horizon DATANG INTL POW is expected to under-perform the National Storage. In addition to that, DATANG INTL is 1.47 times more volatile than National Storage Affiliates. It trades about -0.16 of its total potential returns per unit of risk. National Storage Affiliates is currently generating about 0.17 per unit of volatility. If you would invest 3,961 in National Storage Affiliates on August 30, 2024 and sell it today you would earn a total of 314.00 from holding National Storage Affiliates or generate 7.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
DATANG INTL POW vs. National Storage Affiliates
Performance |
| Timeline |
| DATANG INTL POW |
| National Storage Aff |
DATANG INTL and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DATANG INTL and National Storage
The main advantage of trading using opposite DATANG INTL and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DATANG INTL 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.| DATANG INTL vs. National Beverage Corp | DATANG INTL vs. Harmony Gold Mining | DATANG INTL vs. GRIFFIN MINING LTD | DATANG INTL vs. Tower One Wireless |
| National Storage vs. CubeSmart | National Storage vs. Superior Plus Corp | National Storage vs. SIVERS SEMICONDUCTORS AB | National Storage vs. Talanx AG |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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