Correlation Between National Storage and Coronado Global
Can any of the company-specific risk be diversified away by investing in both National Storage and Coronado Global 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 Coronado Global 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 Coronado Global Resources, you can compare the effects of market volatilities on National Storage and Coronado Global 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 Coronado Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and Coronado Global.
Diversification Opportunities for National Storage and Coronado Global
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between National and Coronado is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding National Storage REIT and Coronado Global Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coronado Global Resources 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 Coronado Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coronado Global Resources has no effect on the direction of National Storage i.e., National Storage and Coronado Global go up and down completely randomly.
Pair Corralation between National Storage and Coronado Global
Assuming the 90 days trading horizon National Storage REIT is expected to generate 0.5 times more return on investment than Coronado Global. However, National Storage REIT is 1.99 times less risky than Coronado Global. It trades about -0.01 of its potential returns per unit of risk. Coronado Global Resources is currently generating about -0.18 per unit of risk. If you would invest 251.00 in National Storage REIT on September 1, 2024 and sell it today you would lose (1.00) from holding National Storage REIT or give up 0.4% 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. Coronado Global Resources
Performance |
| Timeline |
| National Storage REIT |
| Coronado Global Resources |
National Storage and Coronado Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and Coronado Global
The main advantage of trading using opposite National Storage and Coronado Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, Coronado Global 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 Coronado Global will offset losses from the drop in Coronado Global's long position.| National Storage vs. Truscott Mining Corp | National Storage vs. Iron Road | National Storage vs. The Environmental Group | National Storage vs. Bisalloy Steel Group |
| Coronado Global vs. Ramsay Health Care | Coronado Global vs. Oceania Healthcare | Coronado Global vs. Super Retail Group | Coronado Global vs. Charter Hall Education |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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