Correlation Between National Storage and MA Financial
Can any of the company-specific risk be diversified away by investing in both National Storage and MA Financial 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 National Storage and MA Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between National Storage REIT and MA Financial Group, you can compare the effects of market volatilities on National Storage and MA Financial 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 National Storage with a short position of MA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and MA Financial.
Diversification Opportunities for National Storage and MA Financial
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between National and MAF is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding National Storage REIT and MA Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MA Financial Group and National 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 National Storage REIT are associated (or correlated) with MA Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MA Financial Group has no effect on the direction of National Storage i.e., National Storage and MA Financial go up and down completely randomly.
Pair Corralation between National Storage and MA Financial
Assuming the 90 days trading horizon National Storage REIT is expected to generate 0.49 times more return on investment than MA Financial. However, National Storage REIT is 2.05 times less risky than MA Financial. It trades about -0.14 of its potential returns per unit of risk. MA Financial Group is currently generating about -0.13 per unit of risk. If you would invest 252.00 in National Storage REIT on September 25, 2024 and sell it today you would lose (8.00) from holding National Storage REIT or give up 3.17% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
National Storage REIT vs. MA Financial Group
Performance |
Timeline |
National Storage REIT |
MA Financial Group |
National Storage and MA Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with National Storage and MA Financial
The main advantage of trading using opposite National Storage and MA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, MA Financial 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 MA Financial will offset losses from the drop in MA Financial's long position.National Storage vs. Scentre Group | National Storage vs. Vicinity Centres Re | National Storage vs. Charter Hall Retail | National Storage vs. Carindale Property Trust |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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