Correlation Between Extra Space and Hansa Trust
Can any of the company-specific risk be diversified away by investing in both Extra Space and Hansa Trust 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 Hansa Trust 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 Hansa Trust, you can compare the effects of market volatilities on Extra Space and Hansa Trust 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 Hansa Trust. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Hansa Trust.
Diversification Opportunities for Extra Space and Hansa Trust
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Extra and Hansa is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and Hansa Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hansa Trust 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 Hansa Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hansa Trust has no effect on the direction of Extra Space i.e., Extra Space and Hansa Trust go up and down completely randomly.
Pair Corralation between Extra Space and Hansa Trust
Assuming the 90 days trading horizon Extra Space Storage is expected to generate 2.08 times more return on investment than Hansa Trust. However, Extra Space is 2.08 times more volatile than Hansa Trust. It trades about 0.07 of its potential returns per unit of risk. Hansa Trust is currently generating about -0.21 per unit of risk. If you would invest 16,203 in Extra Space Storage on September 5, 2024 and sell it today you would earn a total of 425.00 from holding Extra Space Storage or generate 2.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Extra Space Storage vs. Hansa Trust
Performance |
| Timeline |
| Extra Space Storage |
| Hansa Trust |
Extra Space and Hansa Trust Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and Hansa Trust
The main advantage of trading using opposite Extra Space and Hansa Trust positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, Hansa Trust 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 Hansa Trust will offset losses from the drop in Hansa Trust's long position.| Extra Space vs. Samsung Electronics Co | Extra Space vs. Samsung Electronics Co | Extra Space vs. Hyundai Motor | Extra Space vs. Toyota Motor Corp |
| Hansa Trust vs. Regions Financial Corp | Hansa Trust vs. Extra Space Storage | Hansa Trust vs. National Bank of | Hansa Trust vs. Datagroup SE |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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