Correlation Between AuQ Gold and National Storage
Can any of the company-specific risk be diversified away by investing in both AuQ Gold and National Storage 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 AuQ Gold and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AuQ Gold Mining and National Storage REIT, you can compare the effects of market volatilities on AuQ Gold and National Storage 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 AuQ Gold with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of AuQ Gold and National Storage.
Diversification Opportunities for AuQ Gold and National Storage
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AuQ and National is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding AuQ Gold Mining and National Storage REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Storage REIT and AuQ Gold 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 AuQ Gold Mining are associated (or correlated) with National Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Storage REIT has no effect on the direction of AuQ Gold i.e., AuQ Gold and National Storage go up and down completely randomly.
Pair Corralation between AuQ Gold and National Storage
Assuming the 90 days horizon AuQ Gold Mining is expected to generate 3.24 times more return on investment than National Storage. However, AuQ Gold is 3.24 times more volatile than National Storage REIT. It trades about 0.11 of its potential returns per unit of risk. National Storage REIT is currently generating about -0.02 per unit of risk. If you would invest 12.00 in AuQ Gold Mining on November 2, 2024 and sell it today you would earn a total of 1.00 from holding AuQ Gold Mining or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
AuQ Gold Mining vs. National Storage REIT
Performance |
| Timeline |
| AuQ Gold Mining |
| National Storage REIT |
AuQ Gold and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AuQ Gold and National Storage
The main advantage of trading using opposite AuQ Gold and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AuQ Gold position performs unexpectedly, National Storage 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 National Storage will offset losses from the drop in National Storage's long position.| AuQ Gold vs. SkyWest | AuQ Gold vs. American Airlines Group | AuQ Gold vs. International Consolidated Airlines | AuQ Gold vs. Frontier Group Holdings |
| National Storage vs. National CineMedia | National Storage vs. KVH Industries | National Storage vs. Zhihu Inc ADR | National Storage vs. Radcom |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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