Correlation Between LESTE FDO and Extra Space
Can any of the company-specific risk be diversified away by investing in both LESTE FDO 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 LESTE FDO and Extra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LESTE FDO INV and Extra Space Storage, you can compare the effects of market volatilities on LESTE FDO 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 LESTE FDO with a short position of Extra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of LESTE FDO and Extra Space.
Diversification Opportunities for LESTE FDO and Extra Space
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between LESTE and Extra is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding LESTE FDO INV 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 LESTE FDO 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 LESTE FDO INV 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 LESTE FDO i.e., LESTE FDO and Extra Space go up and down completely randomly.
Pair Corralation between LESTE FDO and Extra Space
Assuming the 90 days trading horizon LESTE FDO INV is expected to under-perform the Extra Space. But the fund apears to be less risky and, when comparing its historical volatility, LESTE FDO INV is 2.12 times less risky than Extra Space. The fund trades about -0.17 of its potential returns per unit of risk. The Extra Space Storage is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 23,376 in Extra Space Storage on September 13, 2024 and sell it today you would earn a total of 1,072 from holding Extra Space Storage or generate 4.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
LESTE FDO INV vs. Extra Space Storage
Performance |
| Timeline |
| LESTE FDO INV |
| Extra Space Storage |
LESTE FDO and Extra Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LESTE FDO and Extra Space
The main advantage of trading using opposite LESTE FDO and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LESTE FDO 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.| LESTE FDO vs. Brio Multiestrategi Fundo | LESTE FDO vs. HEDGE SEED FUNDO | LESTE FDO vs. XP Hoteis Fundo | LESTE FDO vs. EXES FUNDO DE |
| Extra Space vs. Zoom Video Communications | Extra Space vs. Prudential Financial | Extra Space vs. Brpr Corporate Offices | Extra Space vs. Autohome |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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