Correlation Between Safestore Holdings and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Safestore Holdings and Dow Jones 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 Safestore Holdings and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safestore Holdings plc and Dow Jones Industrial, you can compare the effects of market volatilities on Safestore Holdings and Dow Jones 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 Safestore Holdings with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safestore Holdings and Dow Jones.
Diversification Opportunities for Safestore Holdings and Dow Jones
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Safestore and Dow is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Safestore Holdings plc and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and Safestore Holdings 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 Safestore Holdings plc are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Safestore Holdings i.e., Safestore Holdings and Dow Jones go up and down completely randomly.
Pair Corralation between Safestore Holdings and Dow Jones
Assuming the 90 days horizon Safestore Holdings plc is expected to under-perform the Dow Jones. In addition to that, Safestore Holdings is 1.93 times more volatile than Dow Jones Industrial. It trades about -0.04 of its total potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.09 per unit of volatility. If you would invest 3,916,952 in Dow Jones Industrial on September 29, 2024 and sell it today you would earn a total of 382,269 from holding Dow Jones Industrial or generate 9.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safestore Holdings plc vs. Dow Jones Industrial
Performance |
| Timeline |
Safestore Holdings and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Safestore Holdings plc
Pair trading matchups for Safestore Holdings
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Safestore Holdings and Dow Jones
The main advantage of trading using opposite Safestore Holdings and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safestore Holdings position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Safestore Holdings vs. Calibre Mining Corp | Safestore Holdings vs. Jacquet Metal Service | Safestore Holdings vs. Coeur Mining | Safestore Holdings vs. GRIFFIN MINING LTD |
| Dow Jones vs. Eldorado Gold Corp | Dow Jones vs. Flexible Solutions International | Dow Jones vs. Olympic Steel | Dow Jones vs. Valhi Inc |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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