Correlation Between National Storage and ELMOS SEMICONDUCTOR

Can any of the company-specific risk be diversified away by investing in both National Storage and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between National Storage Affiliates and ELMOS SEMICONDUCTOR, you can compare the effects of market volatilities on National Storage and ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and ELMOS SEMICONDUCTOR.

Diversification Opportunities for National Storage and ELMOS SEMICONDUCTOR

0.02

Correlation Coefficient

National Storage  ELMOS SEMICONDUCTOR

Significant diversification

The 3 months correlation between National and ELMOS is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding National Storage Affiliates and ELMOS SEMICONDUCTOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELMOS SEMICONDUCTOR 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 Affiliates are associated (or correlated) with ELMOS SEMICONDUCTOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELMOS SEMICONDUCTOR has no effect on the direction of National Storage i.e., National Storage and ELMOS SEMICONDUCTOR go up and down completely randomly.

Pair Corralation between National Storage and ELMOS SEMICONDUCTOR

Assuming the 90 days horizon National Storage Affiliates is expected to generate 0.56 times more return on investment than ELMOS SEMICONDUCTOR. However, National Storage Affiliates is 1.8 times less risky than ELMOS SEMICONDUCTOR. It trades about 0.0 of its potential returns per unit of risk. ELMOS SEMICONDUCTOR is currently generating about -0.02 per unit of risk. If you would invest  3,706  in National Storage Affiliates on September 29, 2024 and sell it today you would lose (88.00) from holding National Storage Affiliates or give up 2.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

National Storage Affiliates  vs.  ELMOS SEMICONDUCTOR

National Storage Aff

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Storage Affiliates has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

ELMOS SEMICONDUCTOR

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days ELMOS SEMICONDUCTOR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, ELMOS SEMICONDUCTOR is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with National Storage and ELMOS SEMICONDUCTOR

The main advantage of trading using opposite National Storage and ELMOS SEMICONDUCTOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if National Storage position performs unexpectedly, ELMOS SEMICONDUCTOR 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 ELMOS SEMICONDUCTOR will offset losses from the drop in ELMOS SEMICONDUCTOR's long position.

The idea behind National Storage Affiliates and ELMOS SEMICONDUCTOR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.