Correlation Between National Storage and Industrial Logistics
Can any of the company-specific risk be diversified away by investing in both National Storage and Industrial Logistics 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 Industrial Logistics 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 Industrial Logistics Properties, you can compare the effects of market volatilities on National Storage and Industrial Logistics 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 Industrial Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and Industrial Logistics.
Diversification Opportunities for National Storage and Industrial Logistics
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between National and Industrial is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding National Storage Affiliates and Industrial Logistics Propertie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Logistics 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 Industrial Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Logistics has no effect on the direction of National Storage i.e., National Storage and Industrial Logistics go up and down completely randomly.
Pair Corralation between National Storage and Industrial Logistics
Considering the 90-day investment horizon National Storage is expected to generate 1.35 times less return on investment than Industrial Logistics. But when comparing it to its historical volatility, National Storage Affiliates is 1.47 times less risky than Industrial Logistics. It trades about 0.22 of its potential returns per unit of risk. Industrial Logistics Properties is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 354.00 in Industrial Logistics Properties on September 1, 2024 and sell it today you would earn a total of 33.00 from holding Industrial Logistics Properties or generate 9.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Storage Affiliates vs. Industrial Logistics Propertie
Performance |
| Timeline |
| National Storage Aff |
| Industrial Logistics |
National Storage and Industrial Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and Industrial Logistics
The main advantage of trading using opposite National Storage and Industrial Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, Industrial Logistics 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 Industrial Logistics will offset losses from the drop in Industrial Logistics' long position.| National Storage vs. Extra Space Storage | National Storage vs. Americold Realty Trust | National Storage vs. Public Storage | National Storage vs. Terreno Realty |
| Industrial Logistics vs. Terreno Realty | Industrial Logistics vs. LXP Industrial Trust | Industrial Logistics vs. Rexford Industrial Realty | Industrial Logistics vs. First Industrial Realty |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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