Correlation Between Equinix and Centerspace
Can any of the company-specific risk be diversified away by investing in both Equinix and Centerspace 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 Equinix and Centerspace into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Equinix and Centerspace, you can compare the effects of market volatilities on Equinix and Centerspace 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 Equinix with a short position of Centerspace. Check out your portfolio center. Please also check ongoing floating volatility patterns of Equinix and Centerspace.
Diversification Opportunities for Equinix and Centerspace
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Equinix and Centerspace is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding Equinix and Centerspace in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centerspace and Equinix 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 Equinix are associated (or correlated) with Centerspace. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centerspace has no effect on the direction of Equinix i.e., Equinix and Centerspace go up and down completely randomly.
Pair Corralation between Equinix and Centerspace
Given the investment horizon of 90 days Equinix is expected to generate 0.74 times more return on investment than Centerspace. However, Equinix is 1.35 times less risky than Centerspace. It trades about 0.25 of its potential returns per unit of risk. Centerspace is currently generating about 0.07 per unit of risk. If you would invest 90,831 in Equinix on August 29, 2024 and sell it today you would earn a total of 6,995 from holding Equinix or generate 7.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Equinix vs. Centerspace
Performance |
| Timeline |
| Equinix |
| Centerspace |
Equinix and Centerspace Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Equinix and Centerspace
The main advantage of trading using opposite Equinix and Centerspace positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Equinix position performs unexpectedly, Centerspace 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 Centerspace will offset losses from the drop in Centerspace's long position.| Equinix vs. Crown Castle | Equinix vs. American Tower Corp | Equinix vs. Iron Mountain Incorporated | Equinix vs. Hannon Armstrong Sustainable |
| Centerspace vs. BRT Realty Trust | Centerspace vs. Nexpoint Residential Trust | Centerspace vs. Veris Residential | Centerspace vs. Clipper Realty |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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