Correlation Between Extra Space and GlobalData PLC
Can any of the company-specific risk be diversified away by investing in both Extra Space and GlobalData PLC 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 GlobalData PLC 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 GlobalData PLC, you can compare the effects of market volatilities on Extra Space and GlobalData PLC 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 GlobalData PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and GlobalData PLC.
Diversification Opportunities for Extra Space and GlobalData PLC
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Extra and GlobalData is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and GlobalData PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalData PLC 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 GlobalData PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlobalData PLC has no effect on the direction of Extra Space i.e., Extra Space and GlobalData PLC go up and down completely randomly.
Pair Corralation between Extra Space and GlobalData PLC
Assuming the 90 days trading horizon Extra Space is expected to generate 1.34 times less return on investment than GlobalData PLC. But when comparing it to its historical volatility, Extra Space Storage is 1.01 times less risky than GlobalData PLC. It trades about 0.06 of its potential returns per unit of risk. GlobalData PLC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 19,600 in GlobalData PLC on August 29, 2024 and sell it today you would earn a total of 600.00 from holding GlobalData PLC or generate 3.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Extra Space Storage vs. GlobalData PLC
Performance |
| Timeline |
| Extra Space Storage |
| GlobalData PLC |
Extra Space and GlobalData PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and GlobalData PLC
The main advantage of trading using opposite Extra Space and GlobalData PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, GlobalData PLC 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 GlobalData PLC will offset losses from the drop in GlobalData PLC'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 |
| GlobalData PLC vs. Catalyst Media Group | GlobalData PLC vs. CATLIN GROUP | GlobalData PLC vs. Tamburi Investment Partners | GlobalData PLC vs. Magnora ASA |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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