Correlation Between National Storage and MetalsGrove Mining
Can any of the company-specific risk be diversified away by investing in both National Storage and MetalsGrove Mining 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 MetalsGrove Mining 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 MetalsGrove Mining, you can compare the effects of market volatilities on National Storage and MetalsGrove Mining 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 MetalsGrove Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and MetalsGrove Mining.
Diversification Opportunities for National Storage and MetalsGrove Mining
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between National and MetalsGrove is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding National Storage REIT and MetalsGrove Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetalsGrove Mining 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 MetalsGrove Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetalsGrove Mining has no effect on the direction of National Storage i.e., National Storage and MetalsGrove Mining go up and down completely randomly.
Pair Corralation between National Storage and MetalsGrove Mining
Assuming the 90 days trading horizon National Storage REIT is expected to generate 0.19 times more return on investment than MetalsGrove Mining. However, National Storage REIT is 5.23 times less risky than MetalsGrove Mining. It trades about 0.02 of its potential returns per unit of risk. MetalsGrove Mining is currently generating about -0.13 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 Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
National Storage REIT vs. MetalsGrove Mining
Performance |
| Timeline |
| National Storage REIT |
| MetalsGrove Mining |
National Storage and MetalsGrove Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and MetalsGrove Mining
The main advantage of trading using opposite National Storage and MetalsGrove Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, MetalsGrove Mining 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 MetalsGrove Mining will offset losses from the drop in MetalsGrove Mining'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 |
| MetalsGrove Mining vs. Northern Star Resources | MetalsGrove Mining vs. Evolution Mining | MetalsGrove Mining vs. Bluescope Steel | MetalsGrove Mining vs. Sandfire Resources NL |
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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