Correlation Between Gaztransport and Extra Space
Can any of the company-specific risk be diversified away by investing in both Gaztransport and Extra Space 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 Gaztransport and Extra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gaztransport et Technigaz and Extra Space Storage, you can compare the effects of market volatilities on Gaztransport and Extra Space 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 Gaztransport with a short position of Extra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gaztransport and Extra Space.
Diversification Opportunities for Gaztransport and Extra Space
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Gaztransport and Extra is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Gaztransport et Technigaz and Extra Space Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extra Space Storage and Gaztransport 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 Gaztransport et Technigaz are associated (or correlated) with Extra Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extra Space Storage has no effect on the direction of Gaztransport i.e., Gaztransport and Extra Space go up and down completely randomly.
Pair Corralation between Gaztransport and Extra Space
Assuming the 90 days trading horizon Gaztransport is expected to generate 2.26 times less return on investment than Extra Space. But when comparing it to its historical volatility, Gaztransport et Technigaz is 1.53 times less risky than Extra Space. It trades about 0.09 of its potential returns per unit of risk. Extra Space Storage is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 16,203 in Extra Space Storage on September 4, 2024 and sell it today you would earn a total of 860.00 from holding Extra Space Storage or generate 5.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gaztransport et Technigaz vs. Extra Space Storage
Performance |
| Timeline |
| Gaztransport et Technigaz |
| Extra Space Storage |
Gaztransport and Extra Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gaztransport and Extra Space
The main advantage of trading using opposite Gaztransport and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gaztransport position performs unexpectedly, Extra Space 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 Extra Space will offset losses from the drop in Extra Space's long position.| Gaztransport vs. Darden Restaurants | Gaztransport vs. Silvercorp Metals | Gaztransport vs. Neometals | Gaztransport vs. STMicroelectronics NV |
| Extra Space vs. Samsung Electronics Co | Extra Space vs. Samsung Electronics Co | Extra Space vs. Hyundai Motor | Extra Space vs. Toyota Motor Corp |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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