Correlation Between 88 Energy and Extra Space
Can any of the company-specific risk be diversified away by investing in both 88 Energy 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 88 Energy and Extra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 88 Energy and Extra Space Storage, you can compare the effects of market volatilities on 88 Energy 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 88 Energy with a short position of Extra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of 88 Energy and Extra Space.
Diversification Opportunities for 88 Energy and Extra Space
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 88E and Extra is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding 88 Energy 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 88 Energy 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 88 Energy 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 88 Energy i.e., 88 Energy and Extra Space go up and down completely randomly.
Pair Corralation between 88 Energy and Extra Space
Assuming the 90 days trading horizon 88 Energy is expected to under-perform the Extra Space. In addition to that, 88 Energy is 1.79 times more volatile than Extra Space Storage. It trades about -0.3 of its total potential returns per unit of risk. Extra Space Storage is currently generating about 0.16 per unit of volatility. If you would invest 15,597 in Extra Space Storage on November 28, 2024 and sell it today you would earn a total of 577.00 from holding Extra Space Storage or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
88 Energy vs. Extra Space Storage
Performance |
| Timeline |
| 88 Energy |
| Extra Space Storage |
88 Energy and Extra Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 88 Energy and Extra Space
The main advantage of trading using opposite 88 Energy and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 88 Energy 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.| 88 Energy vs. Associated British Foods | 88 Energy vs. Check Point Software | 88 Energy vs. Premier Foods PLC | 88 Energy vs. Vitec Software Group |
| Extra Space vs. Broadcom | Extra Space vs. URU Metals | Extra Space vs. Charter Communications Cl | Extra Space vs. Spirent Communications 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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