Correlation Between Extra Space and Halfords Group
Can any of the company-specific risk be diversified away by investing in both Extra Space and Halfords Group 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 Halfords Group 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 Halfords Group PLC, you can compare the effects of market volatilities on Extra Space and Halfords Group 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 Halfords Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Halfords Group.
Diversification Opportunities for Extra Space and Halfords Group
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Extra and Halfords is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and Halfords Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Halfords Group 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 Halfords Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Halfords Group PLC has no effect on the direction of Extra Space i.e., Extra Space and Halfords Group go up and down completely randomly.
Pair Corralation between Extra Space and Halfords Group
Assuming the 90 days trading horizon Extra Space Storage is expected to generate 0.83 times more return on investment than Halfords Group. However, Extra Space Storage is 1.21 times less risky than Halfords Group. It trades about 0.03 of its potential returns per unit of risk. Halfords Group PLC is currently generating about 0.0 per unit of risk. If you would invest 14,338 in Extra Space Storage on September 4, 2024 and sell it today you would earn a total of 2,725 from holding Extra Space Storage or generate 19.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.99% |
| Values | Daily Returns |
Extra Space Storage vs. Halfords Group PLC
Performance |
| Timeline |
| Extra Space Storage |
| Halfords Group PLC |
Extra Space and Halfords Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and Halfords Group
The main advantage of trading using opposite Extra Space and Halfords Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, Halfords Group 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 Halfords Group will offset losses from the drop in Halfords Group'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 |
| Halfords Group vs. Datalogic | Halfords Group vs. Alliance Data Systems | Halfords Group vs. Cincinnati Financial Corp | Halfords Group vs. UNIQA Insurance Group |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |