Correlation Between National Storage and CLPS
Can any of the company-specific risk be diversified away by investing in both National Storage and CLPS 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 CLPS 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 CLPS Inc, you can compare the effects of market volatilities on National Storage and CLPS 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 CLPS. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and CLPS.
Diversification Opportunities for National Storage and CLPS
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and CLPS is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding National Storage REIT and CLPS Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CLPS Inc 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 CLPS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CLPS Inc has no effect on the direction of National Storage i.e., National Storage and CLPS go up and down completely randomly.
Pair Corralation between National Storage and CLPS
Assuming the 90 days horizon National Storage REIT is expected to under-perform the CLPS. But the pink sheet apears to be less risky and, when comparing its historical volatility, National Storage REIT is 1.9 times less risky than CLPS. The pink sheet trades about -0.02 of its potential returns per unit of risk. The CLPS Inc is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 116.00 in CLPS Inc on November 3, 2024 and sell it today you would earn a total of 10.00 from holding CLPS Inc or generate 8.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Storage REIT vs. CLPS Inc
Performance |
| Timeline |
| National Storage REIT |
| CLPS Inc |
National Storage and CLPS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and CLPS
The main advantage of trading using opposite National Storage and CLPS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, CLPS 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 CLPS will offset losses from the drop in CLPS's long position.| National Storage vs. Goosehead Insurance | National Storage vs. NorthWestern | National Storage vs. Black Hills | National Storage vs. East West Bancorp |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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