Correlation Between National Storage and Public Storage
Can any of the company-specific risk be diversified away by investing in both National Storage 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 Storage 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 Storage Affiliates and Public Storage, you can compare the effects of market volatilities on National Storage 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 Storage with a short position of Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and Public Storage.
Diversification Opportunities for National Storage and Public Storage
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Public is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding National Storage Affiliates and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage and National Storage 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 Storage Affiliates 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 Storage i.e., National Storage and Public Storage go up and down completely randomly.
Pair Corralation between National Storage and Public Storage
Assuming the 90 days trading horizon National Storage is expected to generate 1.97 times less return on investment than Public Storage. In addition to that, National Storage is 2.58 times more volatile than Public Storage. It trades about 0.01 of its total potential returns per unit of risk. Public Storage is currently generating about 0.04 per unit of volatility. If you would invest 1,559 in Public Storage on August 28, 2024 and sell it today you would earn a total of 256.00 from holding Public Storage or generate 16.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 16.77% |
| Values | Daily Returns |
National Storage Affiliates vs. Public Storage
Performance |
| Timeline |
| National Storage Aff |
| Public Storage |
National Storage and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and Public Storage
The main advantage of trading using opposite National Storage and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage 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 Storage vs. National Storage Affiliates | National Storage vs. Innovative Industrial Properties | National Storage vs. Industrial Logistics Properties | National Storage vs. Public Storage |
| Public Storage vs. Public Storage | Public Storage vs. Public Storage | Public Storage vs. Public Storage | Public Storage vs. Public Storage |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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