Correlation Between Lenovo Group and National Storage
Can any of the company-specific risk be diversified away by investing in both Lenovo Group 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 Lenovo Group and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lenovo Group Limited and National Storage Affiliates, you can compare the effects of market volatilities on Lenovo Group 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 Lenovo Group with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lenovo Group and National Storage.
Diversification Opportunities for Lenovo Group and National Storage
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lenovo and National is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Lenovo Group Limited 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 Lenovo Group 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 Lenovo Group Limited 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 Lenovo Group i.e., Lenovo Group and National Storage go up and down completely randomly.
Pair Corralation between Lenovo Group and National Storage
Assuming the 90 days trading horizon Lenovo Group is expected to generate 1.16 times less return on investment than National Storage. In addition to that, Lenovo Group is 1.62 times more volatile than National Storage Affiliates. It trades about 0.03 of its total potential returns per unit of risk. National Storage Affiliates is currently generating about 0.06 per unit of volatility. If you would invest 2,958 in National Storage Affiliates on August 28, 2024 and sell it today you would earn a total of 1,231 from holding National Storage Affiliates or generate 41.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lenovo Group Limited vs. National Storage Affiliates
Performance |
| Timeline |
| Lenovo Group Limited |
| National Storage Aff |
Lenovo Group and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lenovo Group and National Storage
The main advantage of trading using opposite Lenovo Group and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lenovo Group 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.| Lenovo Group vs. QBE Insurance Group | Lenovo Group vs. SALESFORCE INC CDR | Lenovo Group vs. TFS FINANCIAL | Lenovo Group vs. YATRA ONLINE DL 0001 |
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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