Correlation Between Cousins Properties and Extra Space
Can any of the company-specific risk be diversified away by investing in both Cousins Properties 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 Cousins Properties and Extra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cousins Properties Incorporated and Extra Space Storage, you can compare the effects of market volatilities on Cousins Properties 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 Cousins Properties with a short position of Extra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cousins Properties and Extra Space.
Diversification Opportunities for Cousins Properties and Extra Space
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cousins and Extra is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Cousins Properties Incorporate 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 Cousins Properties 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 Cousins Properties Incorporated 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 Cousins Properties i.e., Cousins Properties and Extra Space go up and down completely randomly.
Pair Corralation between Cousins Properties and Extra Space
Considering the 90-day investment horizon Cousins Properties Incorporated is expected to generate 1.06 times more return on investment than Extra Space. However, Cousins Properties is 1.06 times more volatile than Extra Space Storage. It trades about 0.04 of its potential returns per unit of risk. Extra Space Storage is currently generating about 0.02 per unit of risk. If you would invest 2,007 in Cousins Properties Incorporated on January 10, 2025 and sell it today you would earn a total of 584.00 from holding Cousins Properties Incorporated or generate 29.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cousins Properties Incorporate vs. Extra Space Storage
Performance |
| Timeline |
| Cousins Properties |
| Extra Space Storage |
Cousins Properties and Extra Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cousins Properties and Extra Space
The main advantage of trading using opposite Cousins Properties and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cousins Properties 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.| Cousins Properties vs. Boston Properties | Cousins Properties vs. Douglas Emmett | Cousins Properties vs. Kilroy Realty Corp | Cousins Properties vs. Alexandria Real Estate |
| 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |