Correlation Between VF Corp and Extra Space
Can any of the company-specific risk be diversified away by investing in both VF Corp 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 VF Corp and Extra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VF Corp and Extra Space Storage, you can compare the effects of market volatilities on VF Corp 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 VF Corp with a short position of Extra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of VF Corp and Extra Space.
Diversification Opportunities for VF Corp and Extra Space
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 0R30 and Extra is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding VF Corp 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 VF Corp 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 VF Corp 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 VF Corp i.e., VF Corp and Extra Space go up and down completely randomly.
Pair Corralation between VF Corp and Extra Space
Assuming the 90 days trading horizon VF Corp is expected to generate 2.31 times more return on investment than Extra Space. However, VF Corp is 2.31 times more volatile than Extra Space Storage. It trades about 0.26 of its potential returns per unit of risk. Extra Space Storage is currently generating about 0.19 per unit of risk. If you would invest 2,162 in VF Corp on November 8, 2024 and sell it today you would earn a total of 324.00 from holding VF Corp or generate 14.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
VF Corp vs. Extra Space Storage
Performance |
| Timeline |
| VF Corp |
| Extra Space Storage |
VF Corp and Extra Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VF Corp and Extra Space
The main advantage of trading using opposite VF Corp and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VF Corp 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.| VF Corp vs. Take Two Interactive Software | VF Corp vs. Concurrent Technologies Plc | VF Corp vs. Raytheon Technologies Corp | VF Corp vs. Check Point Software |
| Extra Space vs. Polar Capital Technology | Extra Space vs. Spotify Technology SA | Extra Space vs. Concurrent Technologies Plc | Extra Space vs. Ondine Biomedical |
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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