Correlation Between Deltex Medical and Extra Space
Can any of the company-specific risk be diversified away by investing in both Deltex Medical 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 Deltex Medical and Extra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Deltex Medical Group and Extra Space Storage, you can compare the effects of market volatilities on Deltex Medical 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 Deltex Medical with a short position of Extra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Deltex Medical and Extra Space.
Diversification Opportunities for Deltex Medical and Extra Space
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Deltex and Extra is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Deltex Medical Group 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 Deltex Medical 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 Deltex Medical Group 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 Deltex Medical i.e., Deltex Medical and Extra Space go up and down completely randomly.
Pair Corralation between Deltex Medical and Extra Space
Assuming the 90 days trading horizon Deltex Medical Group is expected to under-perform the Extra Space. In addition to that, Deltex Medical is 2.13 times more volatile than Extra Space Storage. It trades about -0.06 of its total potential returns per unit of risk. Extra Space Storage is currently generating about 0.03 per unit of volatility. If you would invest 14,399 in Extra Space Storage on September 2, 2024 and sell it today you would earn a total of 2,826 from holding Extra Space Storage or generate 19.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 96.73% |
| Values | Daily Returns |
Deltex Medical Group vs. Extra Space Storage
Performance |
| Timeline |
| Deltex Medical Group |
| Extra Space Storage |
Deltex Medical and Extra Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Deltex Medical and Extra Space
The main advantage of trading using opposite Deltex Medical and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Deltex Medical 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.| Deltex Medical vs. Samsung Electronics Co | Deltex Medical vs. Samsung Electronics Co | Deltex Medical vs. Hyundai Motor | Deltex Medical vs. Toyota Motor Corp |
| Extra Space vs. Uniper SE | Extra Space vs. Mulberry Group PLC | Extra Space vs. London Security Plc | Extra Space vs. Triad Group 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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