Correlation Between NYSE Composite and Life Storage
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Life 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 NYSE Composite and Life Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Life Storage, you can compare the effects of market volatilities on NYSE Composite and Life 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 NYSE Composite with a short position of Life Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Life Storage.
Diversification Opportunities for NYSE Composite and Life Storage
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between NYSE and Life is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Life Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Storage and NYSE Composite 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 NYSE Composite are associated (or correlated) with Life Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Storage has no effect on the direction of NYSE Composite i.e., NYSE Composite and Life Storage go up and down completely randomly.
Pair Corralation between NYSE Composite and Life Storage
If you would invest 1,613,685 in NYSE Composite on September 2, 2024 and sell it today you would earn a total of 413,519 from holding NYSE Composite or generate 25.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.4% |
| Values | Daily Returns |
NYSE Composite vs. Life Storage
Performance |
| Timeline |
NYSE Composite and Life Storage Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Life Storage
Pair trading matchups for Life Storage
Pair Trading with NYSE Composite and Life Storage
The main advantage of trading using opposite NYSE Composite and Life Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Life 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 Life Storage will offset losses from the drop in Life Storage's long position.| NYSE Composite vs. Simon Property Group | NYSE Composite vs. Merit Medical Systems | NYSE Composite vs. Catalent | NYSE Composite vs. Titan Machinery |
| Life Storage vs. Public Storage | Life Storage vs. CubeSmart | Life Storage vs. National Storage Affiliates | Life Storage vs. Prologis |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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