Correlation Between National Storage and Nufarm Finance
Can any of the company-specific risk be diversified away by investing in both National Storage and Nufarm Finance 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 Nufarm Finance 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 Nufarm Finance NZ, you can compare the effects of market volatilities on National Storage and Nufarm Finance 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 Nufarm Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and Nufarm Finance.
Diversification Opportunities for National Storage and Nufarm Finance
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between National and Nufarm is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding National Storage REIT and Nufarm Finance NZ in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nufarm Finance NZ 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 Nufarm Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nufarm Finance NZ has no effect on the direction of National Storage i.e., National Storage and Nufarm Finance go up and down completely randomly.
Pair Corralation between National Storage and Nufarm Finance
Assuming the 90 days trading horizon National Storage REIT is expected to under-perform the Nufarm Finance. In addition to that, National Storage is 1.66 times more volatile than Nufarm Finance NZ. It trades about -0.01 of its total potential returns per unit of risk. Nufarm Finance NZ is currently generating about 0.26 per unit of volatility. If you would invest 9,040 in Nufarm Finance NZ on September 1, 2024 and sell it today you would earn a total of 310.00 from holding Nufarm Finance NZ or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Storage REIT vs. Nufarm Finance NZ
Performance |
| Timeline |
| National Storage REIT |
| Nufarm Finance NZ |
National Storage and Nufarm Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and Nufarm Finance
The main advantage of trading using opposite National Storage and Nufarm Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, Nufarm Finance 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 Nufarm Finance will offset losses from the drop in Nufarm Finance'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 |
| Nufarm Finance vs. Ecofibre | Nufarm Finance vs. iShares Global Healthcare | Nufarm Finance vs. Ridley | Nufarm Finance vs. Australian Dairy Farms |
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 CEOs Directory module to screen CEOs from public companies around the world.
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