Correlation Between Extra Space and Zurich Insurance
Can any of the company-specific risk be diversified away by investing in both Extra Space and Zurich Insurance 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 Zurich Insurance 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 Zurich Insurance Group, you can compare the effects of market volatilities on Extra Space and Zurich Insurance 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 Zurich Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Zurich Insurance.
Diversification Opportunities for Extra Space and Zurich Insurance
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Extra and Zurich is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and Zurich Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zurich Insurance 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 Zurich Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zurich Insurance has no effect on the direction of Extra Space i.e., Extra Space and Zurich Insurance go up and down completely randomly.
Pair Corralation between Extra Space and Zurich Insurance
Assuming the 90 days trading horizon Extra Space is expected to generate 1.49 times less return on investment than Zurich Insurance. In addition to that, Extra Space is 2.19 times more volatile than Zurich Insurance Group. It trades about 0.1 of its total potential returns per unit of risk. Zurich Insurance Group is currently generating about 0.33 per unit of volatility. If you would invest 52,036 in Zurich Insurance Group on August 28, 2024 and sell it today you would earn a total of 3,164 from holding Zurich Insurance Group or generate 6.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Extra Space Storage vs. Zurich Insurance Group
Performance |
| Timeline |
| Extra Space Storage |
| Zurich Insurance |
Extra Space and Zurich Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and Zurich Insurance
The main advantage of trading using opposite Extra Space and Zurich Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, Zurich Insurance 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 Zurich Insurance will offset losses from the drop in Zurich Insurance's long position.| Extra Space vs. Bank of Ireland | Extra Space vs. SBM Offshore NV | Extra Space vs. Ameriprise Financial | Extra Space vs. Flutter Entertainment PLC |
| Zurich Insurance vs. Cizzle Biotechnology Holdings | Zurich Insurance vs. X FAB Silicon Foundries | Zurich Insurance vs. Allianz Technology Trust | Zurich Insurance vs. Alfa Financial Software |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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