Correlation Between National Storage and Future Health

Can any of the company-specific risk be diversified away by investing in both National Storage and Future Health 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 Future Health 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 Future Health ESG, you can compare the effects of market volatilities on National Storage and Future Health 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 Future Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of National Storage and Future Health.

Diversification Opportunities for National Storage and Future Health

-0.12

Correlation Coefficient

National Storage  Future Health

Good diversification

The 3 months correlation between National and Future is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding National Storage REIT and Future Health ESG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Future Health ESG 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 Future Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Future Health ESG has no effect on the direction of National Storage i.e., National Storage and Future Health go up and down completely randomly.

Pair Corralation between National Storage and Future Health

If you would invest  2.40  in Future Health ESG on October 9, 2024 and sell it today you would earn a total of  0.00  from holding Future Health ESG or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	5.26%
Values	Daily Returns

National Storage REIT  vs.  Future Health ESG

National Storage REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days National Storage REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, National Storage is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Future Health ESG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Future Health ESG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Future Health is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with National Storage and Future Health

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

The idea behind National Storage REIT and Future Health ESG 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.