Correlation Between National Storage and MotorCycle Holdings
Can any of the company-specific risk be diversified away by investing in both National Storage and MotorCycle Holdings 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 MotorCycle Holdings 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 MotorCycle Holdings, you can compare the effects of market volatilities on National Storage and MotorCycle Holdings 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 MotorCycle Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and MotorCycle Holdings.
Diversification Opportunities for National Storage and MotorCycle Holdings
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between National and MotorCycle is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding National Storage REIT and MotorCycle Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MotorCycle Holdings 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 MotorCycle Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MotorCycle Holdings has no effect on the direction of National Storage i.e., National Storage and MotorCycle Holdings go up and down completely randomly.
Pair Corralation between National Storage and MotorCycle Holdings
Assuming the 90 days trading horizon National Storage REIT is expected to generate 0.41 times more return on investment than MotorCycle Holdings. However, National Storage REIT is 2.46 times less risky than MotorCycle Holdings. It trades about 0.03 of its potential returns per unit of risk. MotorCycle Holdings is currently generating about 0.01 per unit of risk. If you would invest 215.00 in National Storage REIT on September 3, 2024 and sell it today you would earn a total of 35.00 from holding National Storage REIT or generate 16.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Storage REIT vs. MotorCycle Holdings
Performance |
| Timeline |
| National Storage REIT |
| MotorCycle Holdings |
National Storage and MotorCycle Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and MotorCycle Holdings
The main advantage of trading using opposite National Storage and MotorCycle Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, MotorCycle Holdings 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 MotorCycle Holdings will offset losses from the drop in MotorCycle Holdings' long position.| National Storage vs. Data3 | National Storage vs. Clime Investment Management | National Storage vs. Truscott Mining Corp | National Storage vs. Pinnacle Investment Management |
| MotorCycle Holdings vs. Westpac Banking | MotorCycle Holdings vs. Champion Iron | MotorCycle Holdings vs. iShares Global Healthcare | MotorCycle Holdings vs. Peel 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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