Correlation Between Americold Realty and Extra Space
Can any of the company-specific risk be diversified away by investing in both Americold Realty 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 Americold Realty and Extra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Americold Realty Trust and Extra Space Storage, you can compare the effects of market volatilities on Americold Realty 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 Americold Realty with a short position of Extra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Americold Realty and Extra Space.
Diversification Opportunities for Americold Realty and Extra Space
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Americold and Extra is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Americold Realty Trust 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 Americold Realty 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 Americold Realty Trust 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 Americold Realty i.e., Americold Realty and Extra Space go up and down completely randomly.
Pair Corralation between Americold Realty and Extra Space
Given the investment horizon of 90 days Americold Realty is expected to generate 1.46 times less return on investment than Extra Space. In addition to that, Americold Realty is 1.67 times more volatile than Extra Space Storage. It trades about 0.1 of its total potential returns per unit of risk. Extra Space Storage is currently generating about 0.25 per unit of volatility. If you would invest 14,801 in Extra Space Storage on November 9, 2024 and sell it today you would earn a total of 804.00 from holding Extra Space Storage or generate 5.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Americold Realty Trust vs. Extra Space Storage
Performance |
| Timeline |
| Americold Realty Trust |
| Extra Space Storage |
Americold Realty and Extra Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Americold Realty and Extra Space
The main advantage of trading using opposite Americold Realty and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Americold Realty 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.| Americold Realty vs. Rexford Industrial Realty | Americold Realty vs. Terreno Realty | Americold Realty vs. First Industrial Realty | Americold Realty vs. Plymouth Industrial REIT |
| Extra Space vs. CubeSmart | Extra Space vs. National Storage Affiliates | Extra Space vs. Public Storage | Extra Space vs. EastGroup Properties |
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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