Correlation Between MA Financial and National Storage
Can any of the company-specific risk be diversified away by investing in both MA Financial 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 MA Financial and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MA Financial Group and National Storage REIT, you can compare the effects of market volatilities on MA Financial 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 MA Financial with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of MA Financial and National Storage.
Diversification Opportunities for MA Financial and National Storage
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between MAF and National is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding MA Financial Group 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 MA Financial 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 MA Financial 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 REIT has no effect on the direction of MA Financial i.e., MA Financial and National Storage go up and down completely randomly.
Pair Corralation between MA Financial and National Storage
Assuming the 90 days trading horizon MA Financial is expected to generate 2.37 times less return on investment than National Storage. In addition to that, MA Financial is 2.1 times more volatile than National Storage REIT. It trades about 0.02 of its total potential returns per unit of risk. National Storage REIT is currently generating about 0.11 per unit of volatility. If you would invest 247.00 in National Storage REIT on August 29, 2024 and sell it today you would earn a total of 6.00 from holding National Storage REIT or generate 2.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MA Financial Group vs. National Storage REIT
Performance |
| Timeline |
| MA Financial Group |
| National Storage REIT |
MA Financial and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MA Financial and National Storage
The main advantage of trading using opposite MA Financial and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MA Financial 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.| MA Financial vs. Champion Iron | MA Financial vs. Ridley | MA Financial vs. Peel Mining | MA Financial vs. Australian Dairy Farms |
| National Storage vs. Australian Unity Office | National Storage vs. Champion Iron | National Storage vs. Ridley | National Storage vs. Peel Mining |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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