Correlation Between Extra Space and REXFORD INDREALTY
Can any of the company-specific risk be diversified away by investing in both Extra Space and REXFORD INDREALTY 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 REXFORD INDREALTY 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 REXFORD INDREALTY DL 01, you can compare the effects of market volatilities on Extra Space and REXFORD INDREALTY 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 REXFORD INDREALTY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and REXFORD INDREALTY.
Diversification Opportunities for Extra Space and REXFORD INDREALTY
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Extra and REXFORD is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and REXFORD INDREALTY DL 01 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on REXFORD INDREALTY 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 REXFORD INDREALTY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of REXFORD INDREALTY has no effect on the direction of Extra Space i.e., Extra Space and REXFORD INDREALTY go up and down completely randomly.
Pair Corralation between Extra Space and REXFORD INDREALTY
Assuming the 90 days horizon Extra Space Storage is expected to generate 0.75 times more return on investment than REXFORD INDREALTY. However, Extra Space Storage is 1.33 times less risky than REXFORD INDREALTY. It trades about -0.08 of its potential returns per unit of risk. REXFORD INDREALTY DL 01 is currently generating about -0.06 per unit of risk. If you would invest 15,445 in Extra Space Storage on September 14, 2024 and sell it today you would lose (305.00) from holding Extra Space Storage or give up 1.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Extra Space Storage vs. REXFORD INDREALTY DL 01
Performance |
| Timeline |
| Extra Space Storage |
| REXFORD INDREALTY |
Extra Space and REXFORD INDREALTY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Extra Space and REXFORD INDREALTY
The main advantage of trading using opposite Extra Space and REXFORD INDREALTY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, REXFORD INDREALTY 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 REXFORD INDREALTY will offset losses from the drop in REXFORD INDREALTY's long position.| Extra Space vs. REXFORD INDREALTY DL 01 | Extra Space vs. CubeSmart | Extra Space vs. First Industrial Realty | Extra Space vs. Warehouses De Pauw |
| REXFORD INDREALTY vs. Extra Space Storage | REXFORD INDREALTY vs. CubeSmart | REXFORD INDREALTY vs. First Industrial Realty | REXFORD INDREALTY vs. Warehouses De Pauw |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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