Correlation Between National Storage and STAG Industrial
Can any of the company-specific risk be diversified away by investing in both National Storage and STAG Industrial 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 STAG Industrial 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 STAG Industrial, you can compare the effects of market volatilities on National Storage and STAG Industrial 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 STAG Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and STAG Industrial.
Diversification Opportunities for National Storage and STAG Industrial
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and STAG is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding National Storage Affiliates and STAG Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAG Industrial 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 STAG Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STAG Industrial has no effect on the direction of National Storage i.e., National Storage and STAG Industrial go up and down completely randomly.
Pair Corralation between National Storage and STAG Industrial
Considering the 90-day investment horizon National Storage Affiliates is expected to generate 1.21 times more return on investment than STAG Industrial. However, National Storage is 1.21 times more volatile than STAG Industrial. It trades about 0.15 of its potential returns per unit of risk. STAG Industrial is currently generating about -0.01 per unit of risk. If you would invest 4,302 in National Storage Affiliates on August 27, 2024 and sell it today you would earn a total of 212.00 from holding National Storage Affiliates or generate 4.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Storage Affiliates vs. STAG Industrial
Performance |
| Timeline |
| National Storage Aff |
| STAG Industrial |
National Storage and STAG Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and STAG Industrial
The main advantage of trading using opposite National Storage and STAG Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, STAG Industrial 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 STAG Industrial will offset losses from the drop in STAG Industrial's long position.| National Storage vs. Extra Space Storage | National Storage vs. Americold Realty Trust | National Storage vs. Public Storage | National Storage vs. Terreno Realty |
| STAG Industrial vs. Public Storage | STAG Industrial vs. Extra Space Storage | STAG Industrial vs. Rexford Industrial Realty | STAG Industrial vs. Innovative Industrial Properties |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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