Correlation Between Extra Space and Wheaton Precious
Can any of the company-specific risk be diversified away by investing in both Extra Space and Wheaton Precious 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 Wheaton Precious 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 Wheaton Precious Metals, you can compare the effects of market volatilities on Extra Space and Wheaton Precious 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 Wheaton Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Wheaton Precious.
Diversification Opportunities for Extra Space and Wheaton Precious
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Extra and Wheaton is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and Wheaton Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wheaton Precious Metals 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 Wheaton Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wheaton Precious Metals has no effect on the direction of Extra Space i.e., Extra Space and Wheaton Precious go up and down completely randomly.
Pair Corralation between Extra Space and Wheaton Precious
Assuming the 90 days trading horizon Extra Space Storage is expected to generate 0.98 times more return on investment than Wheaton Precious. However, Extra Space Storage is 1.02 times less risky than Wheaton Precious. It trades about 0.06 of its potential returns per unit of risk. Wheaton Precious Metals is currently generating about -0.1 per unit of risk. If you would invest 16,672 in Extra Space Storage on August 29, 2024 and sell it today you would earn a total of 365.00 from holding Extra Space Storage or generate 2.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Extra Space Storage vs. Wheaton Precious Metals
Performance |
| Timeline |
| Extra Space Storage |
| Wheaton Precious Metals |
Extra Space and Wheaton Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and Wheaton Precious
The main advantage of trading using opposite Extra Space and Wheaton Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, Wheaton Precious 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 Wheaton Precious will offset losses from the drop in Wheaton Precious' long position.| Extra Space vs. Bank of Ireland | Extra Space vs. SBM Offshore NV | Extra Space vs. Ameriprise Financial | Extra Space vs. Flutter Entertainment PLC |
| Wheaton Precious vs. Atalaya Mining | Wheaton Precious vs. iShares Physical Silver | Wheaton Precious vs. Indutrade AB | Wheaton Precious vs. Anglesey Mining |
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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