Correlation Between Extra Space and Banco Santander
Can any of the company-specific risk be diversified away by investing in both Extra Space and Banco Santander 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 Banco Santander 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 Banco Santander Chile, you can compare the effects of market volatilities on Extra Space and Banco Santander 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 Banco Santander. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Banco Santander.
Diversification Opportunities for Extra Space and Banco Santander
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Extra and Banco is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and Banco Santander Chile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco Santander Chile 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 Banco Santander. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco Santander Chile has no effect on the direction of Extra Space i.e., Extra Space and Banco Santander go up and down completely randomly.
Pair Corralation between Extra Space and Banco Santander
Assuming the 90 days trading horizon Extra Space Storage is expected to generate 1.66 times more return on investment than Banco Santander. However, Extra Space is 1.66 times more volatile than Banco Santander Chile. It trades about 0.06 of its potential returns per unit of risk. Banco Santander Chile is currently generating about 0.05 per unit of risk. If you would invest 18,090 in Extra Space Storage on September 12, 2024 and sell it today you would earn a total of 6,358 from holding Extra Space Storage or generate 35.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 71.39% |
| Values | Daily Returns |
Extra Space Storage vs. Banco Santander Chile
Performance |
| Timeline |
| Extra Space Storage |
| Banco Santander Chile |
Extra Space and Banco Santander Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and Banco Santander
The main advantage of trading using opposite Extra Space and Banco Santander positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, Banco Santander 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 Banco Santander will offset losses from the drop in Banco Santander's long position.| Extra Space vs. BTG Pactual Logstica | Extra Space vs. Fundo Investimento Imobiliario | Extra Space vs. LESTE FDO INV | Extra Space vs. Fras le 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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