Correlation Between Extra Space and AP Moeller
Can any of the company-specific risk be diversified away by investing in both Extra Space and AP Moeller 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 AP Moeller 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 AP Moeller Maersk AS, you can compare the effects of market volatilities on Extra Space and AP Moeller 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 AP Moeller. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and AP Moeller.
Diversification Opportunities for Extra Space and AP Moeller
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Extra and 0O76 is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and AP Moeller Maersk AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Moeller Maersk 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 AP Moeller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Moeller Maersk has no effect on the direction of Extra Space i.e., Extra Space and AP Moeller go up and down completely randomly.
Pair Corralation between Extra Space and AP Moeller
Assuming the 90 days trading horizon Extra Space Storage is expected to generate 0.67 times more return on investment than AP Moeller. However, Extra Space Storage is 1.5 times less risky than AP Moeller. It trades about -0.15 of its potential returns per unit of risk. AP Moeller Maersk AS is currently generating about -0.13 per unit of risk. If you would invest 16,663 in Extra Space Storage on October 23, 2024 and sell it today you would lose (1,487) from holding Extra Space Storage or give up 8.92% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.5% |
| Values | Daily Returns |
Extra Space Storage vs. AP Moeller Maersk AS
Performance |
| Timeline |
| Extra Space Storage |
| AP Moeller Maersk |
Extra Space and AP Moeller Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and AP Moeller
The main advantage of trading using opposite Extra Space and AP Moeller positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, AP Moeller 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 AP Moeller will offset losses from the drop in AP Moeller's long position.| Extra Space vs. Zoom Video Communications | Extra Space vs. Silver Bullet Data | Extra Space vs. Fidelity National Information | Extra Space vs. Public Storage |
| AP Moeller vs. Sealed Air Corp | AP Moeller vs. Taiwan Semiconductor Manufacturing | AP Moeller vs. Extra Space Storage | AP Moeller vs. Systemair AB |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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