Correlation Between Nexus Real and National Storage
Can any of the company-specific risk be diversified away by investing in both Nexus Real 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 Nexus Real and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nexus Real Estate and National Storage Affiliates, you can compare the effects of market volatilities on Nexus Real 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 Nexus Real with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nexus Real and National Storage.
Diversification Opportunities for Nexus Real and National Storage
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nexus and National is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Nexus Real Estate 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 Nexus Real 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 Nexus Real Estate 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 Nexus Real i.e., Nexus Real and National Storage go up and down completely randomly.
Pair Corralation between Nexus Real and National Storage
Assuming the 90 days horizon Nexus Real Estate is expected to under-perform the National Storage. But the pink sheet apears to be less risky and, when comparing its historical volatility, Nexus Real Estate is 1.1 times less risky than National Storage. The pink sheet trades about -0.22 of its potential returns per unit of risk. The National Storage Affiliates is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest 4,215 in National Storage Affiliates on September 1, 2024 and sell it today you would earn a total of 295.00 from holding National Storage Affiliates or generate 7.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Nexus Real Estate vs. National Storage Affiliates
Performance |
| Timeline |
| Nexus Real Estate |
| National Storage Aff |
Nexus Real and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nexus Real and National Storage
The main advantage of trading using opposite Nexus Real and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nexus Real 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.| Nexus Real vs. Boston Properties | Nexus Real vs. Kilroy Realty Corp | Nexus Real vs. SL Green Realty | Nexus Real vs. Vornado Realty Trust |
| National Storage vs. Extra Space Storage | National Storage vs. Americold Realty Trust | National Storage vs. Public Storage | National Storage vs. Terreno Realty |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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