Correlation Between Extra Space and Pets At
Can any of the company-specific risk be diversified away by investing in both Extra Space and Pets At 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 Pets At 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 Pets at Home, you can compare the effects of market volatilities on Extra Space and Pets At 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 Pets At. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Pets At.
Diversification Opportunities for Extra Space and Pets At
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Extra and Pets is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and Pets at Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pets at Home 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 Pets At. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pets at Home has no effect on the direction of Extra Space i.e., Extra Space and Pets At go up and down completely randomly.
Pair Corralation between Extra Space and Pets At
Assuming the 90 days trading horizon Extra Space Storage is expected to generate 0.35 times more return on investment than Pets At. However, Extra Space Storage is 2.88 times less risky than Pets At. It trades about -0.1 of its potential returns per unit of risk. Pets at Home is currently generating about -0.22 per unit of risk. If you would invest 16,459 in Extra Space Storage on September 13, 2024 and sell it today you would lose (519.00) from holding Extra Space Storage or give up 3.15% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Extra Space Storage vs. Pets at Home
Performance |
| Timeline |
| Extra Space Storage |
| Pets at Home |
Extra Space and Pets At Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and Pets At
The main advantage of trading using opposite Extra Space and Pets At positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, Pets At 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 Pets At will offset losses from the drop in Pets At's long position.| Extra Space vs. Monks Investment Trust | Extra Space vs. Livermore Investments Group | Extra Space vs. Cars Inc | Extra Space vs. Sligro Food Group |
| Pets At vs. Fidelity National Information | Pets At vs. Aurora Investment Trust | Pets At vs. Extra Space Storage | Pets At vs. Monks Investment Trust |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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