Correlation Between Albion Technology and Extra Space
Can any of the company-specific risk be diversified away by investing in both Albion Technology 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 Albion Technology and Extra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Albion Technology General and Extra Space Storage, you can compare the effects of market volatilities on Albion Technology 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 Albion Technology with a short position of Extra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Albion Technology and Extra Space.
Diversification Opportunities for Albion Technology and Extra Space
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Albion and Extra is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Albion Technology General 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 Albion Technology 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 Albion Technology General 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 Albion Technology i.e., Albion Technology and Extra Space go up and down completely randomly.
Pair Corralation between Albion Technology and Extra Space
Assuming the 90 days trading horizon Albion Technology General is expected to under-perform the Extra Space. But the stock apears to be less risky and, when comparing its historical volatility, Albion Technology General is 1.32 times less risky than Extra Space. The stock trades about -0.04 of its potential returns per unit of risk. The Extra Space Storage is currently generating about 0.06 of returns per unit of risk over similar time horizon. 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 |
Albion Technology General vs. Extra Space Storage
Performance |
| Timeline |
| Albion Technology General |
| Extra Space Storage |
Albion Technology and Extra Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Albion Technology and Extra Space
The main advantage of trading using opposite Albion Technology and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Albion Technology 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.| Albion Technology vs. Toyota Motor Corp | Albion Technology vs. Lendinvest PLC | Albion Technology vs. Neometals | Albion Technology vs. Coor Service Management |
| Extra Space vs. Lendinvest PLC | Extra Space vs. Neometals | Extra Space vs. Coor Service Management | Extra Space vs. Albion Technology General |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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