Correlation Between Extra Space and Ford
Can any of the company-specific risk be diversified away by investing in both Extra Space and Ford 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 Ford 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 Ford Motor, you can compare the effects of market volatilities on Extra Space and Ford 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 Ford. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Ford.
Diversification Opportunities for Extra Space and Ford
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Extra and Ford is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and Ford Motor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ford Motor 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 Ford. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ford Motor has no effect on the direction of Extra Space i.e., Extra Space and Ford go up and down completely randomly.
Pair Corralation between Extra Space and Ford
If you would invest 24,000 in Extra Space Storage on September 2, 2024 and sell it today you would earn a total of 2,097 from holding Extra Space Storage or generate 8.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Extra Space Storage vs. Ford Motor
Performance |
| Timeline |
| Extra Space Storage |
| Ford Motor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Modest
Extra Space and Ford Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and Ford
The main advantage of trading using opposite Extra Space and Ford positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, Ford 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 Ford will offset losses from the drop in Ford'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 |
| Ford vs. MAHLE Metal Leve | Ford vs. Metalrgica Riosulense SA | Ford vs. Metalurgica Gerdau SA | Ford vs. METISA Metalrgica Timboense |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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