Correlation Between Premier Investments and National Storage
Can any of the company-specific risk be diversified away by investing in both Premier Investments 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 Premier Investments and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Investments and National Storage REIT, you can compare the effects of market volatilities on Premier Investments 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 Premier Investments with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Investments and National Storage.
Diversification Opportunities for Premier Investments and National Storage
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Premier and National is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Premier Investments 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 Premier Investments 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 Premier Investments 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 Premier Investments i.e., Premier Investments and National Storage go up and down completely randomly.
Pair Corralation between Premier Investments and National Storage
Assuming the 90 days trading horizon Premier Investments is expected to under-perform the National Storage. In addition to that, Premier Investments is 3.07 times more volatile than National Storage REIT. It trades about -0.11 of its total potential returns per unit of risk. National Storage REIT is currently generating about -0.12 per unit of volatility. If you would invest 242.00 in National Storage REIT on October 22, 2024 and sell it today you would lose (11.00) from holding National Storage REIT or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premier Investments vs. National Storage REIT
Performance |
| Timeline |
| Premier Investments |
| National Storage REIT |
Premier Investments and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Investments and National Storage
The main advantage of trading using opposite Premier Investments and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Investments 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.| Premier Investments vs. Treasury Wine Estates | Premier Investments vs. Torque Metals | Premier Investments vs. Farm Pride Foods | Premier Investments vs. A1 Investments Resources |
| National Storage vs. MetalsGrove Mining | National Storage vs. Galena Mining | National Storage vs. Bailador Technology Invest | National Storage vs. Black Rock Mining |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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