Correlation Between Iron Mountain and Equinix
Can any of the company-specific risk be diversified away by investing in both Iron Mountain and Equinix 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 Iron Mountain and Equinix into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iron Mountain Incorporated and Equinix, you can compare the effects of market volatilities on Iron Mountain and Equinix 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 Iron Mountain with a short position of Equinix. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iron Mountain and Equinix.
Diversification Opportunities for Iron Mountain and Equinix
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Iron and Equinix is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Iron Mountain Incorporated and Equinix in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equinix and Iron Mountain 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 Iron Mountain Incorporated are associated (or correlated) with Equinix. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equinix has no effect on the direction of Iron Mountain i.e., Iron Mountain and Equinix go up and down completely randomly.
Pair Corralation between Iron Mountain and Equinix
Assuming the 90 days trading horizon Iron Mountain Incorporated is expected to generate 0.93 times more return on investment than Equinix. However, Iron Mountain Incorporated is 1.07 times less risky than Equinix. It trades about 0.22 of its potential returns per unit of risk. Equinix is currently generating about 0.14 per unit of risk. If you would invest 44,544 in Iron Mountain Incorporated on August 29, 2024 and sell it today you would earn a total of 24,462 from holding Iron Mountain Incorporated or generate 54.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 92.13% |
| Values | Daily Returns |
Iron Mountain Incorporated vs. Equinix
Performance |
| Timeline |
| Iron Mountain |
| Equinix |
Iron Mountain and Equinix Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iron Mountain and Equinix
The main advantage of trading using opposite Iron Mountain and Equinix positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iron Mountain position performs unexpectedly, Equinix 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 Equinix will offset losses from the drop in Equinix's long position.| Iron Mountain vs. GP Investments | Iron Mountain vs. salesforce inc | Iron Mountain vs. Tres Tentos Agroindustrial | Iron Mountain vs. Zoom Video Communications |
| Equinix vs. Iron Mountain Incorporated | Equinix vs. Fras le SA | Equinix vs. Clave Indices De | Equinix vs. BTG Pactual Logstica |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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