Correlation Between National Storage and Duxton Broadacre
Can any of the company-specific risk be diversified away by investing in both National Storage and Duxton Broadacre 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 Duxton Broadacre 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 Duxton Broadacre Farms, you can compare the effects of market volatilities on National Storage and Duxton Broadacre 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 Duxton Broadacre. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and Duxton Broadacre.
Diversification Opportunities for National Storage and Duxton Broadacre
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Duxton is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding National Storage REIT and Duxton Broadacre Farms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Duxton Broadacre Farms 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 Duxton Broadacre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Duxton Broadacre Farms has no effect on the direction of National Storage i.e., National Storage and Duxton Broadacre go up and down completely randomly.
Pair Corralation between National Storage and Duxton Broadacre
Assuming the 90 days trading horizon National Storage REIT is expected to generate 0.51 times more return on investment than Duxton Broadacre. However, National Storage REIT is 1.94 times less risky than Duxton Broadacre. It trades about 0.02 of its potential returns per unit of risk. Duxton Broadacre Farms is currently generating about -0.03 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 | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
National Storage REIT vs. Duxton Broadacre Farms
Performance |
| Timeline |
| National Storage REIT |
| Duxton Broadacre Farms |
National Storage and Duxton Broadacre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and Duxton Broadacre
The main advantage of trading using opposite National Storage and Duxton Broadacre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, Duxton Broadacre 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 Duxton Broadacre will offset losses from the drop in Duxton Broadacre'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 |
| Duxton Broadacre vs. Premier Investments | Duxton Broadacre vs. Argo Investments | Duxton Broadacre vs. MFF Capital Investments | Duxton Broadacre vs. COAST ENTERTAINMENT HOLDINGS |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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