Correlation Between Extra Space and BTG Pactual
Can any of the company-specific risk be diversified away by investing in both Extra Space and BTG Pactual 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 BTG Pactual 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 BTG Pactual Logstica, you can compare the effects of market volatilities on Extra Space and BTG Pactual 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 BTG Pactual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and BTG Pactual.
Diversification Opportunities for Extra Space and BTG Pactual
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Extra and BTG is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and BTG Pactual Logstica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BTG Pactual Logstica 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 BTG Pactual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BTG Pactual Logstica has no effect on the direction of Extra Space i.e., Extra Space and BTG Pactual go up and down completely randomly.
Pair Corralation between Extra Space and BTG Pactual
Assuming the 90 days trading horizon Extra Space Storage is expected to generate 3.9 times more return on investment than BTG Pactual. However, Extra Space is 3.9 times more volatile than BTG Pactual Logstica. It trades about 0.03 of its potential returns per unit of risk. BTG Pactual Logstica is currently generating about 0.02 per unit of risk. If you would invest 20,487 in Extra Space Storage on August 30, 2024 and sell it today you would earn a total of 5,088 from holding Extra Space Storage or generate 24.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 79.68% |
| Values | Daily Returns |
Extra Space Storage vs. BTG Pactual Logstica
Performance |
| Timeline |
| Extra Space Storage |
| BTG Pactual Logstica |
Extra Space and BTG Pactual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and BTG Pactual
The main advantage of trading using opposite Extra Space and BTG Pactual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, BTG Pactual 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 BTG Pactual will offset losses from the drop in BTG Pactual's long position.| Extra Space vs. BTG Pactual Logstica | Extra Space vs. Plano Plano Desenvolvimento | Extra Space vs. The Procter Gamble | Extra Space vs. Cable One |
| BTG Pactual vs. BTG Pactual Teva | BTG Pactual vs. BTG PACTUAL CRDITO | BTG Pactual vs. Real Estate Investment | BTG Pactual vs. NAVI CRDITO IMOBILIRIO |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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