Correlation Between National Storage and COAST ENTERTAINMENT
Can any of the company-specific risk be diversified away by investing in both National Storage and COAST ENTERTAINMENT 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 COAST ENTERTAINMENT 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 COAST ENTERTAINMENT HOLDINGS, you can compare the effects of market volatilities on National Storage and COAST ENTERTAINMENT 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 COAST ENTERTAINMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and COAST ENTERTAINMENT.
Diversification Opportunities for National Storage and COAST ENTERTAINMENT
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and COAST is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding National Storage REIT and COAST ENTERTAINMENT HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COAST ENTERTAINMENT 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 COAST ENTERTAINMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COAST ENTERTAINMENT has no effect on the direction of National Storage i.e., National Storage and COAST ENTERTAINMENT go up and down completely randomly.
Pair Corralation between National Storage and COAST ENTERTAINMENT
Assuming the 90 days trading horizon National Storage REIT is expected to generate 0.52 times more return on investment than COAST ENTERTAINMENT. However, National Storage REIT is 1.93 times less risky than COAST ENTERTAINMENT. It trades about 0.02 of its potential returns per unit of risk. COAST ENTERTAINMENT HOLDINGS is currently generating about -0.04 per unit of risk. If you would invest 250.00 in National Storage REIT on September 4, 2024 and sell it today you would earn a total of 1.00 from holding National Storage REIT or generate 0.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Storage REIT vs. COAST ENTERTAINMENT HOLDINGS
Performance |
| Timeline |
| National Storage REIT |
| COAST ENTERTAINMENT |
National Storage and COAST ENTERTAINMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and COAST ENTERTAINMENT
The main advantage of trading using opposite National Storage and COAST ENTERTAINMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, COAST ENTERTAINMENT 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 COAST ENTERTAINMENT will offset losses from the drop in COAST ENTERTAINMENT's long position.| National Storage vs. Scentre Group | National Storage vs. Vicinity Centres Re | National Storage vs. Charter Hall Retail | National Storage vs. Carindale Property Trust |
| COAST ENTERTAINMENT vs. Viva Leisure | COAST ENTERTAINMENT vs. Toys R Us | COAST ENTERTAINMENT vs. Lendlease Group | COAST ENTERTAINMENT vs. Perseus Mining |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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