Correlation Between Extra Space and BE Semiconductor
Can any of the company-specific risk be diversified away by investing in both Extra Space and BE Semiconductor 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 BE Semiconductor 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 BE Semiconductor Industries, you can compare the effects of market volatilities on Extra Space and BE Semiconductor 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 BE Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and BE Semiconductor.
Diversification Opportunities for Extra Space and BE Semiconductor
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Extra and 0XVE is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and BE Semiconductor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BE Semiconductor Ind 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 BE Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BE Semiconductor Ind has no effect on the direction of Extra Space i.e., Extra Space and BE Semiconductor go up and down completely randomly.
Pair Corralation between Extra Space and BE Semiconductor
Assuming the 90 days trading horizon Extra Space Storage is expected to under-perform the BE Semiconductor. But the stock apears to be less risky and, when comparing its historical volatility, Extra Space Storage is 1.9 times less risky than BE Semiconductor. The stock trades about -0.03 of its potential returns per unit of risk. The BE Semiconductor Industries is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 11,253 in BE Semiconductor Industries on November 7, 2024 and sell it today you would earn a total of 762.00 from holding BE Semiconductor Industries or generate 6.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.41% |
| Values | Daily Returns |
Extra Space Storage vs. BE Semiconductor Industries
Performance |
| Timeline |
| Extra Space Storage |
| BE Semiconductor Ind |
Extra Space and BE Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and BE Semiconductor
The main advantage of trading using opposite Extra Space and BE Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, BE Semiconductor 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 BE Semiconductor will offset losses from the drop in BE Semiconductor's long position.| Extra Space vs. Hochschild Mining plc | Extra Space vs. Tata Steel Limited | Extra Space vs. Qurate Retail Series | Extra Space vs. Iron Mountain |
| BE Semiconductor vs. Mobile Tornado Group | BE Semiconductor vs. Infrastrutture Wireless Italiane | BE Semiconductor vs. Alliance Data Systems | BE Semiconductor vs. Ion Beam Applications |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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