Correlation Between National Storage and Resonance Health

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

Diversification Opportunities for National Storage and Resonance Health

0.1

Correlation Coefficient

National Storage  Resonance Health

Average diversification

The 3 months correlation between National and Resonance is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding National Storage REIT and Resonance Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resonance Health 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 Resonance Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resonance Health has no effect on the direction of National Storage i.e., National Storage and Resonance Health go up and down completely randomly.

Pair Corralation between National Storage and Resonance Health

Assuming the 90 days trading horizon National Storage is expected to generate 2.91 times less return on investment than Resonance Health. But when comparing it to its historical volatility, National Storage REIT is 4.81 times less risky than Resonance Health. It trades about 0.13 of its potential returns per unit of risk. Resonance Health is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  3.50  in Resonance Health on April 25, 2025 and sell it today you would earn a total of  0.60  from holding Resonance Health or generate 17.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

National Storage REIT  vs.  Resonance Health

National Storage REIT

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in National Storage REIT are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, National Storage may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Resonance Health

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Resonance Health are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Resonance Health unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with National Storage and Resonance Health

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

The idea behind National Storage REIT and Resonance Health 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.