Correlation Between Extra Space and Companhia Habitasul
Can any of the company-specific risk be diversified away by investing in both Extra Space and Companhia Habitasul 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 Companhia Habitasul 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 Companhia Habitasul de, you can compare the effects of market volatilities on Extra Space and Companhia Habitasul 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 Companhia Habitasul. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Companhia Habitasul.
Diversification Opportunities for Extra Space and Companhia Habitasul
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Extra and Companhia is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and Companhia Habitasul de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Habitasul 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 Companhia Habitasul. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Habitasul has no effect on the direction of Extra Space i.e., Extra Space and Companhia Habitasul go up and down completely randomly.
Pair Corralation between Extra Space and Companhia Habitasul
Assuming the 90 days trading horizon Extra Space Storage is expected to generate 1.53 times more return on investment than Companhia Habitasul. However, Extra Space is 1.53 times more volatile than Companhia Habitasul de. It trades about 0.09 of its potential returns per unit of risk. Companhia Habitasul de is currently generating about -0.04 per unit of risk. If you would invest 23,376 in Extra Space Storage on September 13, 2024 and sell it today you would earn a total of 1,072 from holding Extra Space Storage or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Extra Space Storage vs. Companhia Habitasul de
Performance |
| Timeline |
| Extra Space Storage |
| Companhia Habitasul |
Extra Space and Companhia Habitasul Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and Companhia Habitasul
The main advantage of trading using opposite Extra Space and Companhia Habitasul positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, Companhia Habitasul 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 Companhia Habitasul will offset losses from the drop in Companhia Habitasul'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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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