Correlation Between Fevertree Drinks and Extra Space
Can any of the company-specific risk be diversified away by investing in both Fevertree Drinks 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 Fevertree Drinks and Extra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fevertree Drinks Plc and Extra Space Storage, you can compare the effects of market volatilities on Fevertree Drinks 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 Fevertree Drinks with a short position of Extra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fevertree Drinks and Extra Space.
Diversification Opportunities for Fevertree Drinks and Extra Space
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Fevertree and Extra is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Fevertree Drinks Plc 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 Fevertree Drinks 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 Fevertree Drinks Plc 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 Fevertree Drinks i.e., Fevertree Drinks and Extra Space go up and down completely randomly.
Pair Corralation between Fevertree Drinks and Extra Space
Assuming the 90 days trading horizon Fevertree Drinks Plc is expected to under-perform the Extra Space. In addition to that, Fevertree Drinks is 1.33 times more volatile than Extra Space Storage. It trades about -0.06 of its total potential returns per unit of risk. Extra Space Storage is currently generating about 0.07 per unit of volatility. If you would invest 13,232 in Extra Space Storage on September 4, 2024 and sell it today you would earn a total of 3,831 from holding Extra Space Storage or generate 28.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Fevertree Drinks Plc vs. Extra Space Storage
Performance |
| Timeline |
| Fevertree Drinks Plc |
| Extra Space Storage |
Fevertree Drinks and Extra Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fevertree Drinks and Extra Space
The main advantage of trading using opposite Fevertree Drinks and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fevertree Drinks 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.| Fevertree Drinks vs. Bisichi Mining PLC | Fevertree Drinks vs. Ashtead Technology Holdings | Fevertree Drinks vs. Greenroc Mining PLC | Fevertree Drinks vs. McEwen Mining |
| Extra Space vs. Samsung Electronics Co | Extra Space vs. Samsung Electronics Co | Extra Space vs. Hyundai Motor | Extra Space vs. Toyota Motor Corp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |