Correlation Between IShares Global and National Storage
Can any of the company-specific risk be diversified away by investing in both IShares Global 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 IShares Global and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between iShares Global Healthcare and National Storage REIT, you can compare the effects of market volatilities on IShares Global 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 IShares Global with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of IShares Global and National Storage.
Diversification Opportunities for IShares Global and National Storage
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between IShares and National is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding iShares Global Healthcare 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 IShares Global 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 iShares Global Healthcare 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 IShares Global i.e., IShares Global and National Storage go up and down completely randomly.
Pair Corralation between IShares Global and National Storage
Assuming the 90 days trading horizon iShares Global Healthcare is expected to generate 0.92 times more return on investment than National Storage. However, iShares Global Healthcare is 1.08 times less risky than National Storage. It trades about -0.01 of its potential returns per unit of risk. National Storage REIT is currently generating about -0.01 per unit of risk. If you would invest 14,087 in iShares Global Healthcare on September 2, 2024 and sell it today you would lose (27.00) from holding iShares Global Healthcare or give up 0.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
iShares Global Healthcare vs. National Storage REIT
Performance |
| Timeline |
| iShares Global Healthcare |
| National Storage REIT |
IShares Global and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IShares Global and National Storage
The main advantage of trading using opposite IShares Global and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IShares Global 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.| IShares Global vs. iShares MSCI Emerging | IShares Global vs. iShares Global Aggregate | IShares Global vs. iShares CoreSP MidCap | IShares Global vs. iShares SP 500 |
| National Storage vs. Scentre Group | National Storage vs. Vicinity Centres Re | National Storage vs. Charter Hall Retail | National Storage vs. Cromwell Property Group |
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 Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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