Correlation Between National Storage and Extra Space

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

Diversification Opportunities for National Storage and Extra Space

0.02

Correlation Coefficient

National Storage  Extra Space

Significant diversification

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

Pair Corralation between National Storage and Extra Space

Considering the 90-day investment horizon National Storage Affiliates is expected to under-perform the Extra Space. But the stock apears to be less risky and, when comparing its historical volatility, National Storage Affiliates is 1.09 times less risky than Extra Space. The stock trades about -0.21 of its potential returns per unit of risk. The Extra Space Storage is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  14,776  in Extra Space Storage on May 5, 2025 and sell it today you would lose (846.00) from holding Extra Space Storage or give up 5.73% 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.  Extra Space Storage

National Storage Aff

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in September 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Extra Space Storage

Risk-Adjusted Performance

Very Weak

Over the last 90 days Extra Space Storage has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Extra Space is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with National Storage and Extra Space

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

The idea behind National Storage Affiliates and Extra Space Storage 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.