Correlation Between National Storage and Lykos Metals
Can any of the company-specific risk be diversified away by investing in both National Storage and Lykos Metals 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 Lykos Metals 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 Lykos Metals, you can compare the effects of market volatilities on National Storage and Lykos Metals 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 Lykos Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and Lykos Metals.
Diversification Opportunities for National Storage and Lykos Metals
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between National and Lykos is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding National Storage REIT and Lykos Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lykos Metals 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 Lykos Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lykos Metals has no effect on the direction of National Storage i.e., National Storage and Lykos Metals go up and down completely randomly.
Pair Corralation between National Storage and Lykos Metals
If you would invest 1.00 in Lykos Metals on November 6, 2024 and sell it today you would earn a total of 0.00 from holding Lykos Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Storage REIT vs. Lykos Metals
Performance |
| Timeline |
| National Storage REIT |
| Lykos Metals |
National Storage and Lykos Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and Lykos Metals
The main advantage of trading using opposite National Storage and Lykos Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, Lykos Metals 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 Lykos Metals will offset losses from the drop in Lykos Metals' 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 |
| Lykos Metals vs. Retail Food Group | Lykos Metals vs. Phoslock Environmental Technologies | Lykos Metals vs. ARN Media Limited | Lykos Metals vs. Iron Road |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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