Correlation Between Extra Space and Life Storage
Can any of the company-specific risk be diversified away by investing in both Extra Space and Life Storage 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 Life Storage 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 Life Storage, you can compare the effects of market volatilities on Extra Space and Life Storage 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 Life Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Life Storage.
Diversification Opportunities for Extra Space and Life Storage
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Extra and Life is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and Life Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Storage 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 Life Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Storage has no effect on the direction of Extra Space i.e., Extra Space and Life Storage go up and down completely randomly.
Pair Corralation between Extra Space and Life Storage
If you would invest 16,746 in Extra Space Storage on August 28, 2024 and sell it today you would earn a total of 295.00 from holding Extra Space Storage or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
Extra Space Storage vs. Life Storage
Performance |
| Timeline |
| Extra Space Storage |
| Life Storage |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Extra Space and Life Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and Life Storage
The main advantage of trading using opposite Extra Space and Life Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, Life Storage 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 Life Storage will offset losses from the drop in Life Storage's long position.| Extra Space vs. CubeSmart | Extra Space vs. National Storage Affiliates | Extra Space vs. Public Storage | Extra Space vs. EastGroup Properties |
| Life Storage vs. Public Storage | Life Storage vs. CubeSmart | Life Storage vs. National Storage Affiliates | Life Storage vs. Prologis |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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