Correlation Between Extra Space and Batm Advanced
Can any of the company-specific risk be diversified away by investing in both Extra Space and Batm Advanced 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 Batm Advanced 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 Batm Advanced Communications, you can compare the effects of market volatilities on Extra Space and Batm Advanced 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 Batm Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Batm Advanced.
Diversification Opportunities for Extra Space and Batm Advanced
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Extra and Batm is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and Batm Advanced Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Batm Advanced Commun 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 Batm Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Batm Advanced Commun has no effect on the direction of Extra Space i.e., Extra Space and Batm Advanced go up and down completely randomly.
Pair Corralation between Extra Space and Batm Advanced
Assuming the 90 days trading horizon Extra Space Storage is expected to generate 0.44 times more return on investment than Batm Advanced. However, Extra Space Storage is 2.28 times less risky than Batm Advanced. It trades about 0.11 of its potential returns per unit of risk. Batm Advanced Communications is currently generating about 0.0 per unit of risk. If you would invest 14,158 in Extra Space Storage on August 31, 2024 and sell it today you would earn a total of 3,067 from holding Extra Space Storage or generate 21.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.23% |
| Values | Daily Returns |
Extra Space Storage vs. Batm Advanced Communications
Performance |
| Timeline |
| Extra Space Storage |
| Batm Advanced Commun |
Extra Space and Batm Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and Batm Advanced
The main advantage of trading using opposite Extra Space and Batm Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, Batm Advanced 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 Batm Advanced will offset losses from the drop in Batm Advanced's long position.| Extra Space vs. Neometals | Extra Space vs. Coor Service Management | Extra Space vs. Aeorema Communications Plc | Extra Space vs. JLEN Environmental Assets |
| Batm Advanced vs. CVR Energy | Batm Advanced vs. Viridian Therapeutics | Batm Advanced vs. Nationwide Building Society | Batm Advanced vs. News Corp Cl |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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