Correlation Between Sterling Construction and National Storage
Can any of the company-specific risk be diversified away by investing in both Sterling Construction 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 Sterling Construction and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sterling Construction and National Storage Affiliates, you can compare the effects of market volatilities on Sterling Construction 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 Sterling Construction with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sterling Construction and National Storage.
Diversification Opportunities for Sterling Construction and National Storage
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sterling and National is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Sterling Construction 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 Sterling Construction 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 Sterling Construction 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 Sterling Construction i.e., Sterling Construction and National Storage go up and down completely randomly.
Pair Corralation between Sterling Construction and National Storage
Given the investment horizon of 90 days Sterling Construction is expected to generate 2.81 times more return on investment than National Storage. However, Sterling Construction is 2.81 times more volatile than National Storage Affiliates. It trades about 0.03 of its potential returns per unit of risk. National Storage Affiliates is currently generating about -0.08 per unit of risk. If you would invest 31,616 in Sterling Construction on September 11, 2025 and sell it today you would earn a total of 794.00 from holding Sterling Construction or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sterling Construction vs. National Storage Affiliates
Performance |
| Timeline |
| Sterling Construction |
| National Storage Aff |
Sterling Construction and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sterling Construction and National Storage
The main advantage of trading using opposite Sterling Construction and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sterling Construction 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.| Sterling Construction vs. Topbuild Corp | Sterling Construction vs. Stantec | Sterling Construction vs. Builders FirstSource | Sterling Construction vs. Huntington Ingalls Industries |
| National Storage vs. LXP Industrial Trust | National Storage vs. Douglas Emmett | National Storage vs. Inventrust Properties Corp | National Storage vs. EPR Properties |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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