Correlation Between SBI Insurance and National Storage
Can any of the company-specific risk be diversified away by investing in both SBI Insurance 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 SBI Insurance and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBI Insurance Group and National Storage Affiliates, you can compare the effects of market volatilities on SBI Insurance 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 SBI Insurance with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Insurance and National Storage.
Diversification Opportunities for SBI Insurance and National Storage
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between SBI and National is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding SBI Insurance Group 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 SBI Insurance 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 SBI Insurance Group 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 SBI Insurance i.e., SBI Insurance and National Storage go up and down completely randomly.
Pair Corralation between SBI Insurance and National Storage
Assuming the 90 days trading horizon SBI Insurance Group is expected to generate 0.68 times more return on investment than National Storage. However, SBI Insurance Group is 1.47 times less risky than National Storage. It trades about 0.31 of its potential returns per unit of risk. National Storage Affiliates is currently generating about 0.18 per unit of risk. If you would invest 545.00 in SBI Insurance Group on August 29, 2024 and sell it today you would earn a total of 55.00 from holding SBI Insurance Group or generate 10.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Insurance Group vs. National Storage Affiliates
Performance |
| Timeline |
| SBI Insurance Group |
| National Storage Aff |
SBI Insurance and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Insurance and National Storage
The main advantage of trading using opposite SBI Insurance and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Insurance 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.| SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc | SBI Insurance vs. Apple Inc |
| 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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