Correlation Between Extra Space and Vinci SA
Can any of the company-specific risk be diversified away by investing in both Extra Space and Vinci SA 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 Vinci SA 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 Vinci SA, you can compare the effects of market volatilities on Extra Space and Vinci SA 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 Vinci SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Vinci SA.
Diversification Opportunities for Extra Space and Vinci SA
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Extra and Vinci is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and Vinci SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vinci SA 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 Vinci SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vinci SA has no effect on the direction of Extra Space i.e., Extra Space and Vinci SA go up and down completely randomly.
Pair Corralation between Extra Space and Vinci SA
Assuming the 90 days trading horizon Extra Space Storage is expected to under-perform the Vinci SA. In addition to that, Extra Space is 1.05 times more volatile than Vinci SA. It trades about -0.14 of its total potential returns per unit of risk. Vinci SA is currently generating about -0.01 per unit of volatility. If you would invest 10,120 in Vinci SA on September 12, 2024 and sell it today you would lose (38.00) from holding Vinci SA or give up 0.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Extra Space Storage vs. Vinci SA
Performance |
| Timeline |
| Extra Space Storage |
| Vinci SA |
Extra Space and Vinci SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and Vinci SA
The main advantage of trading using opposite Extra Space and Vinci SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, Vinci SA 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 Vinci SA will offset losses from the drop in Vinci SA's long position.| Extra Space vs. Hong Kong Land | Extra Space vs. Neometals | Extra Space vs. Coor Service Management | Extra Space vs. Fidelity Sustainable USD |
| Vinci SA vs. Extra Space Storage | Vinci SA vs. Blackrock World Mining | Vinci SA vs. AfriTin Mining | Vinci SA vs. Automatic Data Processing |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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