Correlation Between Extra Space and SANTANDER
Can any of the company-specific risk be diversified away by investing in both Extra Space and SANTANDER 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 SANTANDER 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 SANTANDER UK 8, you can compare the effects of market volatilities on Extra Space and SANTANDER 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 SANTANDER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and SANTANDER.
Diversification Opportunities for Extra Space and SANTANDER
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Extra and SANTANDER is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and SANTANDER UK 8 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SANTANDER UK 8 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 SANTANDER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SANTANDER UK 8 has no effect on the direction of Extra Space i.e., Extra Space and SANTANDER go up and down completely randomly.
Pair Corralation between Extra Space and SANTANDER
Assuming the 90 days trading horizon Extra Space is expected to generate 1.21 times less return on investment than SANTANDER. In addition to that, Extra Space is 3.01 times more volatile than SANTANDER UK 8. It trades about 0.02 of its total potential returns per unit of risk. SANTANDER UK 8 is currently generating about 0.07 per unit of volatility. If you would invest 10,589 in SANTANDER UK 8 on September 14, 2024 and sell it today you would earn a total of 2,961 from holding SANTANDER UK 8 or generate 27.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.19% |
| Values | Daily Returns |
Extra Space Storage vs. SANTANDER UK 8
Performance |
| Timeline |
| Extra Space Storage |
| SANTANDER UK 8 |
Extra Space and SANTANDER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and SANTANDER
The main advantage of trading using opposite Extra Space and SANTANDER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, SANTANDER 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 SANTANDER will offset losses from the drop in SANTANDER's long position.| Extra Space vs. Ross Stores | Extra Space vs. Bisichi Mining PLC | Extra Space vs. Hochschild Mining plc | Extra Space vs. AMG Advanced Metallurgical |
| SANTANDER vs. Blackrock World Mining | SANTANDER vs. Odfjell Drilling | SANTANDER vs. Orient Telecoms | SANTANDER vs. Extra Space Storage |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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