Correlation Between National Storage and AiMedia Technologies
Can any of the company-specific risk be diversified away by investing in both National Storage and AiMedia Technologies 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 AiMedia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Storage REIT and AiMedia Technologies, you can compare the effects of market volatilities on National Storage and AiMedia Technologies 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 AiMedia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and AiMedia Technologies.
Diversification Opportunities for National Storage and AiMedia Technologies
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between National and AiMedia is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding National Storage REIT and AiMedia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AiMedia Technologies 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 REIT are associated (or correlated) with AiMedia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AiMedia Technologies has no effect on the direction of National Storage i.e., National Storage and AiMedia Technologies go up and down completely randomly.
Pair Corralation between National Storage and AiMedia Technologies
Assuming the 90 days trading horizon National Storage REIT is expected to generate 0.28 times more return on investment than AiMedia Technologies. However, National Storage REIT is 3.53 times less risky than AiMedia Technologies. It trades about -0.27 of its potential returns per unit of risk. AiMedia Technologies is currently generating about -0.2 per unit of risk. If you would invest 238.00 in National Storage REIT on November 6, 2024 and sell it today you would lose (13.00) from holding National Storage REIT or give up 5.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Storage REIT vs. AiMedia Technologies
Performance |
| Timeline |
| National Storage REIT |
| AiMedia Technologies |
National Storage and AiMedia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and AiMedia Technologies
The main advantage of trading using opposite National Storage and AiMedia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, AiMedia Technologies 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 AiMedia Technologies will offset losses from the drop in AiMedia Technologies' long position.| National Storage vs. DMC Mining | National Storage vs. Black Rock Mining | National Storage vs. Mount Gibson Iron | National Storage vs. Ora Banda Mining |
| AiMedia Technologies vs. Hansen Technologies | AiMedia Technologies vs. Beam Communications Holdings | AiMedia Technologies vs. Ambertech | AiMedia Technologies vs. Air New Zealand |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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