Correlation Between National Bank and Public Storage
Can any of the company-specific risk be diversified away by investing in both National Bank and Public 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 National Bank and Public Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Bank Holdings and Public Storage, you can compare the effects of market volatilities on National Bank and Public 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 National Bank with a short position of Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Bank and Public Storage.
Diversification Opportunities for National Bank and Public Storage
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between National and Public is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding National Bank Holdings and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage and National Bank 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 National Bank Holdings are associated (or correlated) with Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of National Bank i.e., National Bank and Public Storage go up and down completely randomly.
Pair Corralation between National Bank and Public Storage
Assuming the 90 days horizon National Bank Holdings is expected to generate 1.48 times more return on investment than Public Storage. However, National Bank is 1.48 times more volatile than Public Storage. It trades about 0.03 of its potential returns per unit of risk. Public Storage is currently generating about 0.04 per unit of risk. If you would invest 3,673 in National Bank Holdings on September 5, 2024 and sell it today you would earn a total of 767.00 from holding National Bank Holdings or generate 20.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
National Bank Holdings vs. Public Storage
Performance |
| Timeline |
| National Bank Holdings |
| Public Storage |
National Bank and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Bank and Public Storage
The main advantage of trading using opposite National Bank and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Bank position performs unexpectedly, Public 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 Public Storage will offset losses from the drop in Public Storage's long position.| National Bank vs. AM EAGLE OUTFITTERS | National Bank vs. PSI Software AG | National Bank vs. AXWAY SOFTWARE EO | National Bank vs. CyberArk Software |
| Public Storage vs. TYSNES SPAREBANK NK | Public Storage vs. CDN IMPERIAL BANK | Public Storage vs. VIRG NATL BANKSH | Public Storage vs. Chiba Bank |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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