Correlation Between National Storage and Zhihu

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

Diversification Opportunities for National Storage and Zhihu

0.13

Correlation Coefficient

National Storage  Zhihu

Average diversification

The 3 months correlation between National and Zhihu is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding National Storage REIT and Zhihu Inc ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zhihu Inc ADR 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 Zhihu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zhihu Inc ADR has no effect on the direction of National Storage i.e., National Storage and Zhihu go up and down completely randomly.

Pair Corralation between National Storage and Zhihu

Assuming the 90 days horizon National Storage REIT is expected to generate 1.32 times more return on investment than Zhihu. However, National Storage is 1.32 times more volatile than Zhihu Inc ADR. It trades about 0.08 of its potential returns per unit of risk. Zhihu Inc ADR is currently generating about 0.02 per unit of risk. If you would invest  139.00  in National Storage REIT on May 6, 2025 and sell it today you would earn a total of  21.00  from holding National Storage REIT or generate 15.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

National Storage REIT  vs.  Zhihu Inc ADR

National Storage REIT

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in National Storage REIT are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, National Storage reported solid returns over the last few months and may actually be approaching a breakup point.

Zhihu Inc ADR

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Zhihu Inc ADR are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong technical indicators, Zhihu is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with National Storage and Zhihu

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

The idea behind National Storage REIT and Zhihu Inc ADR 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.