Correlation Between British Amer and National Storage
Can any of the company-specific risk be diversified away by investing in both British Amer 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 British Amer and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bailador Technology Invest and National Storage REIT, you can compare the effects of market volatilities on British Amer 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 British Amer with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of British Amer and National Storage.
Diversification Opportunities for British Amer and National Storage
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between British and National is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Bailador Technology Invest 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 British Amer 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 Bailador Technology Invest 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 British Amer i.e., British Amer and National Storage go up and down completely randomly.
Pair Corralation between British Amer and National Storage
Assuming the 90 days trading horizon Bailador Technology Invest is expected to generate 0.75 times more return on investment than National Storage. However, Bailador Technology Invest is 1.33 times less risky than National Storage. It trades about 0.21 of its potential returns per unit of risk. National Storage REIT is currently generating about -0.2 per unit of risk. If you would invest 120.00 in Bailador Technology Invest on November 3, 2024 and sell it today you would earn a total of 4.00 from holding Bailador Technology Invest or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bailador Technology Invest vs. National Storage REIT
Performance |
| Timeline |
| Bailador Technology |
| National Storage REIT |
British Amer and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with British Amer and National Storage
The main advantage of trading using opposite British Amer and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if British Amer 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.| British Amer vs. Insurance Australia Group | British Amer vs. Health and Plant | British Amer vs. Perpetual Credit Income | British Amer vs. Event Hospitality and |
| National Storage vs. Charter Hall Retail | National Storage vs. Cromwell Property Group | National Storage vs. Australian Unity Office | National Storage vs. Ecofibre |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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