Correlation Between Chuangs China and National Storage
Can any of the company-specific risk be diversified away by investing in both Chuangs China 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 Chuangs China and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chuangs China Investments and National Storage Affiliates, you can compare the effects of market volatilities on Chuangs China 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 Chuangs China with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chuangs China and National Storage.
Diversification Opportunities for Chuangs China and National Storage
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chuangs and National is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Chuangs China Investments 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 Chuangs China 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 Chuangs China 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 Aff has no effect on the direction of Chuangs China i.e., Chuangs China and National Storage go up and down completely randomly.
Pair Corralation between Chuangs China and National Storage
If you would invest 3,805 in National Storage Affiliates on September 3, 2024 and sell it today you would earn a total of 465.00 from holding National Storage Affiliates or generate 12.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chuangs China Investments vs. National Storage Affiliates
Performance |
| Timeline |
| Chuangs China Investments |
| National Storage Aff |
Chuangs China and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chuangs China and National Storage
The main advantage of trading using opposite Chuangs China and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chuangs China 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.| Chuangs China vs. Treasury Wine Estates | Chuangs China vs. GigaMedia | Chuangs China vs. NAKED WINES PLC | Chuangs China vs. Tencent Music Entertainment |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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