Correlation Between PUBLIC STORAGE and National Health
Can any of the company-specific risk be diversified away by investing in both PUBLIC STORAGE and National Health 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 PUBLIC STORAGE and National Health into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PUBLIC STORAGE PRFO and National Health Investors, you can compare the effects of market volatilities on PUBLIC STORAGE and National Health 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 PUBLIC STORAGE with a short position of National Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of PUBLIC STORAGE and National Health.
Diversification Opportunities for PUBLIC STORAGE and National Health
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between PUBLIC and National is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding PUBLIC STORAGE PRFO and National Health Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on National Health Investors and PUBLIC 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 PUBLIC STORAGE PRFO are associated (or correlated) with National Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of National Health Investors has no effect on the direction of PUBLIC STORAGE i.e., PUBLIC STORAGE and National Health go up and down completely randomly.
Pair Corralation between PUBLIC STORAGE and National Health
Assuming the 90 days trading horizon PUBLIC STORAGE is expected to generate 3.49 times less return on investment than National Health. But when comparing it to its historical volatility, PUBLIC STORAGE PRFO is 1.69 times less risky than National Health. It trades about 0.05 of its potential returns per unit of risk. National Health Investors is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,612 in National Health Investors on September 14, 2024 and sell it today you would earn a total of 2,338 from holding National Health Investors or generate 50.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PUBLIC STORAGE PRFO vs. National Health Investors
Performance |
| Timeline |
| PUBLIC STORAGE PRFO |
| National Health Investors |
PUBLIC STORAGE and National Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PUBLIC STORAGE and National Health
The main advantage of trading using opposite PUBLIC STORAGE and National Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PUBLIC STORAGE position performs unexpectedly, National Health 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 Health will offset losses from the drop in National Health's long position.| PUBLIC STORAGE vs. Xtrackers LevDAX | PUBLIC STORAGE vs. Xtrackers ShortDAX | PUBLIC STORAGE vs. Lyxor 1 | PUBLIC STORAGE vs. SIVERS SEMICONDUCTORS AB |
| National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc | National Health vs. Apple Inc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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