Correlation Between Extra Space and Teladoc Health
Can any of the company-specific risk be diversified away by investing in both Extra Space and Teladoc Health 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 Teladoc Health 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 Teladoc Health, you can compare the effects of market volatilities on Extra Space and Teladoc Health 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 Teladoc Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Teladoc Health.
Diversification Opportunities for Extra Space and Teladoc Health
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Extra and Teladoc is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and Teladoc Health in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teladoc Health 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 Teladoc Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teladoc Health has no effect on the direction of Extra Space i.e., Extra Space and Teladoc Health go up and down completely randomly.
Pair Corralation between Extra Space and Teladoc Health
Assuming the 90 days trading horizon Extra Space Storage is expected to under-perform the Teladoc Health. But the stock apears to be less risky and, when comparing its historical volatility, Extra Space Storage is 1.62 times less risky than Teladoc Health. The stock trades about -0.1 of its potential returns per unit of risk. The Teladoc Health is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 192.00 in Teladoc Health on November 6, 2024 and sell it today you would earn a total of 7.00 from holding Teladoc Health or generate 3.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Extra Space Storage vs. Teladoc Health
Performance |
| Timeline |
| Extra Space Storage |
| Teladoc Health |
Extra Space and Teladoc Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and Teladoc Health
The main advantage of trading using opposite Extra Space and Teladoc Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, Teladoc Health 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 Teladoc Health will offset losses from the drop in Teladoc Health's long position.| Extra Space vs. T Mobile | Extra Space vs. Check Point Software | Extra Space vs. Guidewire Software, | Extra Space vs. United Natural Foods, |
| Teladoc Health vs. Waste Management | Teladoc Health vs. Marfrig Global Foods | Teladoc Health vs. Pentair plc | Teladoc Health vs. LPL Financial Holdings |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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