Correlation Between DFS Furniture and Extra Space
Can any of the company-specific risk be diversified away by investing in both DFS Furniture 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 DFS Furniture and Extra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DFS Furniture PLC and Extra Space Storage, you can compare the effects of market volatilities on DFS Furniture 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 DFS Furniture with a short position of Extra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of DFS Furniture and Extra Space.
Diversification Opportunities for DFS Furniture and Extra Space
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DFS and Extra is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding DFS Furniture PLC 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 DFS Furniture 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 DFS Furniture PLC 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 DFS Furniture i.e., DFS Furniture and Extra Space go up and down completely randomly.
Pair Corralation between DFS Furniture and Extra Space
Assuming the 90 days trading horizon DFS Furniture is expected to generate 1.93 times less return on investment than Extra Space. In addition to that, DFS Furniture is 1.11 times more volatile than Extra Space Storage. It trades about 0.08 of its total potential returns per unit of risk. Extra Space Storage is currently generating about 0.17 per unit of volatility. If you would invest 16,203 in Extra Space Storage on September 3, 2024 and sell it today you would earn a total of 1,022 from holding Extra Space Storage or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DFS Furniture PLC vs. Extra Space Storage
Performance |
| Timeline |
| DFS Furniture PLC |
| Extra Space Storage |
DFS Furniture and Extra Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DFS Furniture and Extra Space
The main advantage of trading using opposite DFS Furniture and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DFS Furniture 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.| DFS Furniture vs. Rockfire Resources plc | DFS Furniture vs. Tlou Energy | DFS Furniture vs. Falcon Oil Gas | DFS Furniture vs. Helium One Global |
| Extra Space vs. Gaztransport et Technigaz | Extra Space vs. Summit Materials Cl | Extra Space vs. DFS Furniture PLC | Extra Space vs. Fevertree Drinks 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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