Correlation Between Fidelity National and Extra Space
Can any of the company-specific risk be diversified away by investing in both Fidelity National and Extra Space 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 Fidelity National and Extra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fidelity National Information and Extra Space Storage, you can compare the effects of market volatilities on Fidelity National and Extra Space 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 Fidelity National with a short position of Extra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fidelity National and Extra Space.
Diversification Opportunities for Fidelity National and Extra Space
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Fidelity and Extra is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Fidelity National Information and Extra Space Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Extra Space Storage and Fidelity National 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 Fidelity National Information are associated (or correlated) with Extra Space. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Extra Space Storage has no effect on the direction of Fidelity National i.e., Fidelity National and Extra Space go up and down completely randomly.
Pair Corralation between Fidelity National and Extra Space
Assuming the 90 days trading horizon Fidelity National Information is expected to under-perform the Extra Space. But the stock apears to be less risky and, when comparing its historical volatility, Fidelity National Information is 2.97 times less risky than Extra Space. The stock trades about -0.33 of its potential returns per unit of risk. The Extra Space Storage is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 23,680 in Extra Space Storage on August 27, 2024 and sell it today you would earn a total of 872.00 from holding Extra Space Storage or generate 3.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Fidelity National Information vs. Extra Space Storage
Performance |
| Timeline |
| Fidelity National |
| Extra Space Storage |
Fidelity National and Extra Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fidelity National and Extra Space
The main advantage of trading using opposite Fidelity National and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fidelity National position performs unexpectedly, Extra Space 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 Extra Space will offset losses from the drop in Extra Space's long position.| Fidelity National vs. Fras le SA | Fidelity National vs. Clave Indices De | Fidelity National vs. BTG Pactual Logstica | Fidelity National vs. Telefonaktiebolaget LM Ericsson |
| Extra Space vs. BTG Pactual Logstica | Extra Space vs. Fras le SA | Extra Space vs. Clave Indices De | Extra Space vs. Telefonaktiebolaget LM Ericsson |
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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