Correlation Between Extra Space and Premier Foods
Can any of the company-specific risk be diversified away by investing in both Extra Space and Premier Foods 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 Premier Foods 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 Premier Foods PLC, you can compare the effects of market volatilities on Extra Space and Premier Foods 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 Premier Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Premier Foods.
Diversification Opportunities for Extra Space and Premier Foods
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Extra and Premier is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and Premier Foods PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Foods 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 Premier Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Foods PLC has no effect on the direction of Extra Space i.e., Extra Space and Premier Foods go up and down completely randomly.
Pair Corralation between Extra Space and Premier Foods
Assuming the 90 days trading horizon Extra Space Storage is expected to under-perform the Premier Foods. In addition to that, Extra Space is 1.52 times more volatile than Premier Foods PLC. It trades about -0.05 of its total potential returns per unit of risk. Premier Foods PLC is currently generating about 0.19 per unit of volatility. If you would invest 18,440 in Premier Foods PLC on January 21, 2025 and sell it today you would earn a total of 1,120 from holding Premier Foods PLC or generate 6.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Extra Space Storage vs. Premier Foods PLC
Performance |
| Timeline |
| Extra Space Storage |
| Premier Foods PLC |
Extra Space and Premier Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and Premier Foods
The main advantage of trading using opposite Extra Space and Premier Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, Premier Foods 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 Premier Foods will offset losses from the drop in Premier Foods' long position.| Extra Space vs. Primorus Investments plc | Extra Space vs. Seraphim Space Investment | Extra Space vs. TR Property Investment | Extra Space vs. Various Eateries PLC |
| Premier Foods vs. H C Slingsby | Premier Foods vs. Uniper SE | Premier Foods vs. London Security Plc | Premier Foods vs. Mulberry Group PLC |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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