Correlation Between Safestore Holdings and National Storage
Can any of the company-specific risk be diversified away by investing in both Safestore Holdings 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 Safestore Holdings and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safestore Holdings plc and National Storage Affiliates, you can compare the effects of market volatilities on Safestore Holdings 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 Safestore Holdings with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safestore Holdings and National Storage.
Diversification Opportunities for Safestore Holdings and National Storage
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Safestore and National is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Safestore Holdings plc 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 Safestore Holdings 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 Safestore Holdings plc 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 Safestore Holdings i.e., Safestore Holdings and National Storage go up and down completely randomly.
Pair Corralation between Safestore Holdings and National Storage
Assuming the 90 days horizon Safestore Holdings plc is expected to under-perform the National Storage. In addition to that, Safestore Holdings is 1.75 times more volatile than National Storage Affiliates. It trades about -0.3 of its total potential returns per unit of risk. National Storage Affiliates is currently generating about 0.24 per unit of volatility. If you would invest 4,197 in National Storage Affiliates on September 3, 2024 and sell it today you would earn a total of 313.00 from holding National Storage Affiliates or generate 7.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safestore Holdings plc vs. National Storage Affiliates
Performance |
| Timeline |
| Safestore Holdings plc |
| National Storage Aff |
Safestore Holdings and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safestore Holdings and National Storage
The main advantage of trading using opposite Safestore Holdings and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safestore Holdings 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.| Safestore Holdings vs. Apple Inc | Safestore Holdings vs. Microsoft | Safestore Holdings vs. Amazon Inc | Safestore Holdings vs. Alphabet Inc Class C |
| National Storage vs. SCOR PK | National Storage vs. Aquagold International | National Storage vs. SPACE | National Storage vs. T Rowe Price |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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