Correlation Between Extra Space and Annaly Capital
Can any of the company-specific risk be diversified away by investing in both Extra Space and Annaly Capital 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 Annaly Capital 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 Annaly Capital Management,, you can compare the effects of market volatilities on Extra Space and Annaly Capital 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 Annaly Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Annaly Capital.
Diversification Opportunities for Extra Space and Annaly Capital
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Extra and Annaly is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and Annaly Capital Management, in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Annaly Capital Manag 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 Annaly Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Annaly Capital Manag has no effect on the direction of Extra Space i.e., Extra Space and Annaly Capital go up and down completely randomly.
Pair Corralation between Extra Space and Annaly Capital
Assuming the 90 days trading horizon Extra Space Storage is expected to generate 1.82 times more return on investment than Annaly Capital. However, Extra Space is 1.82 times more volatile than Annaly Capital Management,. It trades about -0.01 of its potential returns per unit of risk. Annaly Capital Management, is currently generating about -0.09 per unit of risk. If you would invest 24,284 in Extra Space Storage on October 12, 2024 and sell it today you would lose (284.00) from holding Extra Space Storage or give up 1.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 88.89% |
| Values | Daily Returns |
Extra Space Storage vs. Annaly Capital Management,
Performance |
| Timeline |
| Extra Space Storage |
| Annaly Capital Manag |
Extra Space and Annaly Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and Annaly Capital
The main advantage of trading using opposite Extra Space and Annaly Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, Annaly Capital 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 Annaly Capital will offset losses from the drop in Annaly Capital's long position.| Extra Space vs. Vulcan Materials | Extra Space vs. Spotify Technology SA | Extra Space vs. T Mobile | Extra Space vs. Electronic Arts |
| Annaly Capital vs. Verizon Communications | Annaly Capital vs. Unity Software | Annaly Capital vs. T Mobile | Annaly Capital vs. Metalurgica Gerdau SA |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device |