Correlation Between Extra Space and Ameriprise Financial
Can any of the company-specific risk be diversified away by investing in both Extra Space and Ameriprise Financial 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 Extra Space and Ameriprise Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extra Space Storage and Ameriprise Financial, you can compare the effects of market volatilities on Extra Space and Ameriprise Financial 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 Extra Space with a short position of Ameriprise Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Ameriprise Financial.
Diversification Opportunities for Extra Space and Ameriprise Financial
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Extra and Ameriprise is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and Ameriprise Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameriprise Financial and Extra Space 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 Extra Space Storage are associated (or correlated) with Ameriprise Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameriprise Financial has no effect on the direction of Extra Space i.e., Extra Space and Ameriprise Financial go up and down completely randomly.
Pair Corralation between Extra Space and Ameriprise Financial
Assuming the 90 days trading horizon Extra Space is expected to generate 1.19 times less return on investment than Ameriprise Financial. In addition to that, Extra Space is 1.3 times more volatile than Ameriprise Financial. It trades about 0.14 of its total potential returns per unit of risk. Ameriprise Financial is currently generating about 0.22 per unit of volatility. If you would invest 55,996 in Ameriprise Financial on September 1, 2024 and sell it today you would earn a total of 29,860 from holding Ameriprise Financial or generate 53.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Extra Space Storage vs. Ameriprise Financial
Performance |
| Timeline |
| Extra Space Storage |
| Ameriprise Financial |
Extra Space and Ameriprise Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and Ameriprise Financial
The main advantage of trading using opposite Extra Space and Ameriprise Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, Ameriprise Financial 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 Ameriprise Financial will offset losses from the drop in Ameriprise Financial's long position.| Extra Space vs. BTG Pactual Logstica | Extra Space vs. Fras le SA | Extra Space vs. Western Digital | Extra Space vs. Energisa SA |
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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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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