Correlation Between GX AI and Extra Space
Can any of the company-specific risk be diversified away by investing in both GX AI 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 GX AI and Extra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GX AI TECH and Extra Space Storage, you can compare the effects of market volatilities on GX AI 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 GX AI with a short position of Extra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of GX AI and Extra Space.
Diversification Opportunities for GX AI and Extra Space
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between BAIQ39 and Extra is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding GX AI TECH 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 GX AI 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 GX AI TECH 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 GX AI i.e., GX AI and Extra Space go up and down completely randomly.
Pair Corralation between GX AI and Extra Space
Assuming the 90 days trading horizon GX AI is expected to generate 1.1 times less return on investment than Extra Space. But when comparing it to its historical volatility, GX AI TECH is 1.63 times less risky than Extra Space. It trades about 0.14 of its potential returns per unit of risk. Extra Space Storage is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 15,433 in Extra Space Storage on September 12, 2024 and sell it today you would earn a total of 9,015 from holding Extra Space Storage or generate 58.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 87.13% |
| Values | Daily Returns |
GX AI TECH vs. Extra Space Storage
Performance |
| Timeline |
| GX AI TECH |
| Extra Space Storage |
GX AI and Extra Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GX AI and Extra Space
The main advantage of trading using opposite GX AI and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GX AI 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.| GX AI vs. Taiwan Semiconductor Manufacturing | GX AI vs. Apple Inc | GX AI vs. Alibaba Group Holding | GX AI vs. Microsoft |
| Extra Space vs. BTG Pactual Logstica | Extra Space vs. Fundo Investimento Imobiliario | Extra Space vs. LESTE FDO INV | Extra Space vs. Fras le SA |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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