Correlation Between Gold Road and National Storage
Can any of the company-specific risk be diversified away by investing in both Gold Road 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 Gold Road and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gold Road Resources and National Storage REIT, you can compare the effects of market volatilities on Gold Road 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 Gold Road with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gold Road and National Storage.
Diversification Opportunities for Gold Road and National Storage
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Gold and National is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Gold Road Resources 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 Gold Road 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 Gold Road Resources 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 Gold Road i.e., Gold Road and National Storage go up and down completely randomly.
Pair Corralation between Gold Road and National Storage
Assuming the 90 days trading horizon Gold Road Resources is expected to generate 2.37 times more return on investment than National Storage. However, Gold Road is 2.37 times more volatile than National Storage REIT. It trades about 0.09 of its potential returns per unit of risk. National Storage REIT is currently generating about -0.06 per unit of risk. If you would invest 193.00 in Gold Road Resources on October 6, 2024 and sell it today you would earn a total of 16.00 from holding Gold Road Resources or generate 8.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Gold Road Resources vs. National Storage REIT
Performance |
Timeline |
Gold Road Resources |
National Storage REIT |
Gold Road and National Storage Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Gold Road and National Storage
The main advantage of trading using opposite Gold Road and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gold Road 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.Gold Road vs. Neurotech International | Gold Road vs. Viva Leisure | Gold Road vs. Ras Technology Holdings | Gold Road vs. Mach7 Technologies |
National Storage vs. Hudson Investment Group | National Storage vs. Clime Investment Management | National Storage vs. Dug Technology | National Storage vs. Diversified United Investment |
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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