Correlation Between China Datang and National Storage
Can any of the company-specific risk be diversified away by investing in both China Datang 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 China Datang and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Datang and National Storage Affiliates, you can compare the effects of market volatilities on China Datang 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 China Datang with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Datang and National Storage.
Diversification Opportunities for China Datang and National Storage
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and National is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding China Datang 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 China Datang 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 China Datang 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 China Datang i.e., China Datang and National Storage go up and down completely randomly.
Pair Corralation between China Datang and National Storage
Assuming the 90 days horizon China Datang is expected to generate 1.46 times less return on investment than National Storage. In addition to that, China Datang is 1.75 times more volatile than National Storage Affiliates. It trades about 0.07 of its total potential returns per unit of risk. National Storage Affiliates is currently generating about 0.18 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 317.00 from holding National Storage Affiliates or generate 8.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
China Datang vs. National Storage Affiliates
Performance |
| Timeline |
| China Datang |
| National Storage Aff |
China Datang and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Datang and National Storage
The main advantage of trading using opposite China Datang and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Datang 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.| China Datang vs. Superior Plus Corp | China Datang vs. SIVERS SEMICONDUCTORS AB | China Datang vs. Talanx AG | China Datang vs. 2G ENERGY |
| 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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