Correlation Between Extra Space and Apple
Can any of the company-specific risk be diversified away by investing in both Extra Space and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on Extra Space and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Apple.
Diversification Opportunities for Extra Space and Apple
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Extra and Apple is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple Inc 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of Extra Space i.e., Extra Space and Apple go up and down completely randomly.
Pair Corralation between Extra Space and Apple
Assuming the 90 days trading horizon Extra Space is expected to generate 15.38 times less return on investment than Apple. In addition to that, Extra Space is 1.7 times more volatile than Apple Inc. It trades about 0.0 of its total potential returns per unit of risk. Apple Inc is currently generating about 0.09 per unit of volatility. If you would invest 6,368 in Apple Inc on November 6, 2024 and sell it today you would earn a total of 538.00 from holding Apple Inc or generate 8.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Extra Space Storage vs. Apple Inc
Performance |
| Timeline |
| Extra Space Storage |
| Apple Inc |
Extra Space and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and Apple
The main advantage of trading using opposite Extra Space and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| Extra Space vs. T Mobile | Extra Space vs. Check Point Software | Extra Space vs. Guidewire Software, | Extra Space vs. United Natural Foods, |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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