Correlation Between National Storage and Vast Renewables
Can any of the company-specific risk be diversified away by investing in both National Storage and Vast Renewables 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 Vast Renewables 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 Vast Renewables Limited, you can compare the effects of market volatilities on National Storage and Vast Renewables 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 Vast Renewables. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and Vast Renewables.
Diversification Opportunities for National Storage and Vast Renewables
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and Vast is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding National Storage REIT and Vast Renewables Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vast Renewables 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 Vast Renewables. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vast Renewables has no effect on the direction of National Storage i.e., National Storage and Vast Renewables go up and down completely randomly.
Pair Corralation between National Storage and Vast Renewables
Assuming the 90 days horizon National Storage REIT is expected to generate 0.11 times more return on investment than Vast Renewables. However, National Storage REIT is 8.73 times less risky than Vast Renewables. It trades about -0.02 of its potential returns per unit of risk. Vast Renewables Limited is currently generating about -0.15 per unit of risk. If you would invest 145.00 in National Storage REIT on November 4, 2024 and sell it today you would lose (1.00) from holding National Storage REIT or give up 0.69% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
National Storage REIT vs. Vast Renewables Limited
Performance |
| Timeline |
| National Storage REIT |
| Vast Renewables |
National Storage and Vast Renewables Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with National Storage and Vast Renewables
The main advantage of trading using opposite National Storage and Vast Renewables positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, Vast Renewables 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 Vast Renewables will offset losses from the drop in Vast Renewables' long position.| National Storage vs. Allient | National Storage vs. Skillful Craftsman Education | National Storage vs. Western Digital | National Storage vs. Sun Country Airlines |
| Vast Renewables vs. SYNTHETIC FIXED INCOME | Vast Renewables vs. Ecovyst | Vast Renewables vs. Park Electrochemical | Vast Renewables vs. Hawkins |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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