Correlation Between National Storage and British Amer
Can any of the company-specific risk be diversified away by investing in both National Storage and British Amer 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 British Amer 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 Bailador Technology Invest, you can compare the effects of market volatilities on National Storage and British Amer 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 British Amer. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and British Amer.
Diversification Opportunities for National Storage and British Amer
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and British is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding National Storage REIT and Bailador Technology Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bailador Technology 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 British Amer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bailador Technology has no effect on the direction of National Storage i.e., National Storage and British Amer go up and down completely randomly.
Pair Corralation between National Storage and British Amer
Assuming the 90 days trading horizon National Storage REIT is expected to generate 1.01 times more return on investment than British Amer. However, National Storage is 1.01 times more volatile than Bailador Technology Invest. It trades about 0.03 of its potential returns per unit of risk. Bailador Technology Invest is currently generating about 0.02 per unit of risk. If you would invest 213.00 in National Storage REIT on August 29, 2024 and sell it today you would earn a total of 40.00 from holding National Storage REIT or generate 18.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Storage REIT vs. Bailador Technology Invest
Performance |
| Timeline |
| National Storage REIT |
| Bailador Technology |
National Storage and British Amer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and British Amer
The main advantage of trading using opposite National Storage and British Amer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, British Amer 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 British Amer will offset losses from the drop in British Amer's long position.| National Storage vs. Australian Unity Office | National Storage vs. Champion Iron | National Storage vs. Ridley | National Storage vs. Peel Mining |
| British Amer vs. Champion Iron | British Amer vs. Ridley | British Amer vs. Peel Mining | British Amer vs. Australian Dairy Farms |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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