Correlation Between Extra Space and Public Storage
Can any of the company-specific risk be diversified away by investing in both Extra Space and Public 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 Public 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 Public Storage, you can compare the effects of market volatilities on Extra Space and Public 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 Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Public Storage.
Diversification Opportunities for Extra Space and Public Storage
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Extra and Public is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage 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 Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of Extra Space i.e., Extra Space and Public Storage go up and down completely randomly.
Pair Corralation between Extra Space and Public Storage
Assuming the 90 days trading horizon Extra Space is expected to generate 1.55 times less return on investment than Public Storage. In addition to that, Extra Space is 1.11 times more volatile than Public Storage. It trades about 0.02 of its total potential returns per unit of risk. Public Storage is currently generating about 0.04 per unit of volatility. If you would invest 28,656 in Public Storage on September 14, 2024 and sell it today you would earn a total of 3,469 from holding Public Storage or generate 12.11% 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. Public Storage
Performance |
| Timeline |
| Extra Space Storage |
| Public Storage |
Extra Space and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and Public Storage
The main advantage of trading using opposite Extra Space and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, Public 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 Public Storage will offset losses from the drop in Public Storage's long position.| Extra Space vs. Ross Stores | Extra Space vs. Bisichi Mining PLC | Extra Space vs. Hochschild Mining plc | Extra Space vs. AMG Advanced Metallurgical |
| Public Storage vs. Hilton Food Group | Public Storage vs. Ebro Foods | Public Storage vs. Grieg Seafood | Public Storage vs. Edita Food Industries |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios |