Correlation Between Extra Space and Global X
Can any of the company-specific risk be diversified away by investing in both Extra Space and Global X 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 Global X 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 Global X Funds, you can compare the effects of market volatilities on Extra Space and Global X 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 Global X. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Global X.
Diversification Opportunities for Extra Space and Global X
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Extra and Global is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and Global X Funds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global X Funds 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 Global X. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global X Funds has no effect on the direction of Extra Space i.e., Extra Space and Global X go up and down completely randomly.
Pair Corralation between Extra Space and Global X
Assuming the 90 days trading horizon Extra Space Storage is expected to generate 1.4 times more return on investment than Global X. However, Extra Space is 1.4 times more volatile than Global X Funds. It trades about 0.14 of its potential returns per unit of risk. Global X Funds is currently generating about 0.11 per unit of risk. If you would invest 18,487 in Extra Space Storage on September 1, 2024 and sell it today you would earn a total of 7,610 from holding Extra Space Storage or generate 41.16% 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. Global X Funds
Performance |
| Timeline |
| Extra Space Storage |
| Global X Funds |
Extra Space and Global X Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and Global X
The main advantage of trading using opposite Extra Space and Global X positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, Global X 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 Global X will offset losses from the drop in Global X'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 |
| Global X vs. Taiwan Semiconductor Manufacturing | Global X vs. Alibaba Group Holding | Global X vs. Microsoft | Global X vs. Alphabet |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities |