Correlation Between NYSE Composite and National Storage
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and National 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 National Storage Affiliates, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and National Storage.
Diversification Opportunities for NYSE Composite and National Storage
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NYSE and National is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and National Storage Affiliates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Storage Aff 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 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 Aff has no effect on the direction of NYSE Composite i.e., NYSE Composite and National Storage go up and down completely randomly.
Pair Corralation between NYSE Composite and National Storage
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.35 times more return on investment than National Storage. However, NYSE Composite is 2.85 times less risky than National Storage. It trades about 0.08 of its potential returns per unit of risk. National Storage Affiliates is currently generating about 0.0 per unit of risk. If you would invest 1,557,252 in NYSE Composite on November 9, 2024 and sell it today you would earn a total of 458,506 from holding NYSE Composite or generate 29.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 26.57% |
| Values | Daily Returns |
NYSE Composite vs. National Storage Affiliates
Performance |
| Timeline |
NYSE Composite and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
National Storage Affiliates
Pair trading matchups for National Storage
Pair Trading with NYSE Composite and National Storage
The main advantage of trading using opposite NYSE Composite and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Integrated Media Technology | NYSE Composite vs. Custom Truck One | NYSE Composite vs. Funko Inc | NYSE Composite vs. Multi Ways Holdings |
| National Storage vs. Genesco | National Storage vs. CAVA Group, | National Storage vs. Chipotle Mexican Grill | National Storage vs. Destination XL 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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