Correlation Between Extra Space and National Storage
Can any of the company-specific risk be diversified away by investing in both Extra Space 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 Extra Space and National Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extra Space Storage and National Storage Affiliates, you can compare the effects of market volatilities on Extra Space 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 Extra Space with a short position of National Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and National Storage.
Diversification Opportunities for Extra Space and National Storage
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Extra and National is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage 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 Extra Space 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 Extra Space Storage 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 Extra Space i.e., Extra Space and National Storage go up and down completely randomly.
Pair Corralation between Extra Space and National Storage
Considering the 90-day investment horizon Extra Space Storage is expected to generate 1.03 times more return on investment than National Storage. However, Extra Space is 1.03 times more volatile than National Storage Affiliates. It trades about 0.02 of its potential returns per unit of risk. National Storage Affiliates is currently generating about 0.01 per unit of risk. If you would invest 14,561 in Extra Space Storage on November 9, 2024 and sell it today you would earn a total of 1,044 from holding Extra Space Storage or generate 7.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Extra Space Storage vs. National Storage Affiliates
Performance |
| Timeline |
| Extra Space Storage |
| National Storage Aff |
Extra Space and National Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and National Storage
The main advantage of trading using opposite Extra Space and National Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space 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.| Extra Space vs. CubeSmart | Extra Space vs. National Storage Affiliates | Extra Space vs. Public Storage | Extra Space vs. EastGroup Properties |
| National Storage vs. Extra Space Storage | National Storage vs. Americold Realty Trust | National Storage vs. Public Storage | National Storage vs. Terreno Realty |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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