Correlation Between Extra Space and Anglo Asian
Can any of the company-specific risk be diversified away by investing in both Extra Space and Anglo Asian 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 Anglo Asian 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 Anglo Asian Mining, you can compare the effects of market volatilities on Extra Space and Anglo Asian 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 Anglo Asian. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Anglo Asian.
Diversification Opportunities for Extra Space and Anglo Asian
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Extra and Anglo is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and Anglo Asian Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anglo Asian Mining 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 Anglo Asian. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anglo Asian Mining has no effect on the direction of Extra Space i.e., Extra Space and Anglo Asian go up and down completely randomly.
Pair Corralation between Extra Space and Anglo Asian
Assuming the 90 days trading horizon Extra Space is expected to generate 3.61 times less return on investment than Anglo Asian. But when comparing it to its historical volatility, Extra Space Storage is 2.6 times less risky than Anglo Asian. It trades about 0.09 of its potential returns per unit of risk. Anglo Asian Mining is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 5,900 in Anglo Asian Mining on September 2, 2024 and sell it today you would earn a total of 4,250 from holding Anglo Asian Mining or generate 72.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.23% |
| Values | Daily Returns |
Extra Space Storage vs. Anglo Asian Mining
Performance |
| Timeline |
| Extra Space Storage |
| Anglo Asian Mining |
Extra Space and Anglo Asian Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and Anglo Asian
The main advantage of trading using opposite Extra Space and Anglo Asian positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, Anglo Asian 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 Anglo Asian will offset losses from the drop in Anglo Asian's long position.| Extra Space vs. Uniper SE | Extra Space vs. Mulberry Group PLC | Extra Space vs. London Security Plc | Extra Space vs. Triad Group PLC |
| Anglo Asian vs. Automatic Data Processing | Anglo Asian vs. Datagroup SE | Anglo Asian vs. Applied Materials | Anglo Asian vs. Compagnie Plastic Omnium |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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