Correlation Between National Storage and Independence Realty
Can any of the company-specific risk be diversified away by investing in both National Storage and Independence Realty 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 Independence Realty 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 Independence Realty Trust, you can compare the effects of market volatilities on National Storage and Independence Realty 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 Independence Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and Independence Realty.
Diversification Opportunities for National Storage and Independence Realty
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between National and Independence is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding National Storage Affiliates and Independence Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Independence Realty Trust 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 Independence Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Independence Realty Trust has no effect on the direction of National Storage i.e., National Storage and Independence Realty go up and down completely randomly.
Pair Corralation between National Storage and Independence Realty
Considering the 90-day investment horizon National Storage is expected to generate 1.14 times less return on investment than Independence Realty. In addition to that, National Storage is 1.26 times more volatile than Independence Realty Trust. It trades about 0.14 of its total potential returns per unit of risk. Independence Realty Trust is currently generating about 0.2 per unit of volatility. If you would invest 1,595 in Independence Realty Trust on August 28, 2024 and sell it today you would earn a total of 579.00 from holding Independence Realty Trust or generate 36.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Storage Affiliates vs. Independence Realty Trust
Performance |
| Timeline |
| National Storage Aff |
| Independence Realty Trust |
National Storage and Independence Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and Independence Realty
The main advantage of trading using opposite National Storage and Independence Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, Independence Realty 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 Independence Realty will offset losses from the drop in Independence Realty's long position.| National Storage vs. Public Storage | National Storage vs. Prologis | National Storage vs. EastGroup Properties | National Storage vs. Rexford Industrial Realty |
| Independence Realty vs. Apartment Investment and | Independence Realty vs. Clipper Realty | Independence Realty vs. BRT Realty Trust | Independence Realty vs. UDR Inc |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |