Correlation Between National Storage and Southern Cross
Can any of the company-specific risk be diversified away by investing in both National Storage and Southern Cross 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 Southern Cross 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 Southern Cross Media, you can compare the effects of market volatilities on National Storage and Southern Cross 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 Southern Cross. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and Southern Cross.
Diversification Opportunities for National Storage and Southern Cross
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between National and Southern is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding National Storage REIT and Southern Cross Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Southern Cross Media 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 Southern Cross. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Southern Cross Media has no effect on the direction of National Storage i.e., National Storage and Southern Cross go up and down completely randomly.
Pair Corralation between National Storage and Southern Cross
Assuming the 90 days trading horizon National Storage is expected to generate 4.26 times less return on investment than Southern Cross. But when comparing it to its historical volatility, National Storage REIT is 3.83 times less risky than Southern Cross. It trades about 0.14 of its potential returns per unit of risk. Southern Cross Media is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 57.00 in Southern Cross Media on October 14, 2024 and sell it today you would earn a total of 5.00 from holding Southern Cross Media or generate 8.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Storage REIT vs. Southern Cross Media
Performance |
| Timeline |
| National Storage REIT |
| Southern Cross Media |
National Storage and Southern Cross Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and Southern Cross
The main advantage of trading using opposite National Storage and Southern Cross positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, Southern Cross 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 Southern Cross will offset losses from the drop in Southern Cross' long position.| National Storage vs. Ironbark Capital | National Storage vs. Super Retail Group | National Storage vs. Actinogen Medical | National Storage vs. Tombador Iron |
| Southern Cross vs. National Storage REIT | Southern Cross vs. BKI Investment | Southern Cross vs. Aristocrat Leisure | Southern Cross vs. Autosports Group |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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