Correlation Between Life Storage and Mapletree Logistics
Can any of the company-specific risk be diversified away by investing in both Life Storage and Mapletree Logistics 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 Life Storage and Mapletree Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Life Storage and Mapletree Logistics Trust, you can compare the effects of market volatilities on Life Storage and Mapletree Logistics 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 Life Storage with a short position of Mapletree Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Life Storage and Mapletree Logistics.
Diversification Opportunities for Life Storage and Mapletree Logistics
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Life and Mapletree is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Life Storage and Mapletree Logistics Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mapletree Logistics Trust and Life Storage 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 Life Storage are associated (or correlated) with Mapletree Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mapletree Logistics Trust has no effect on the direction of Life Storage i.e., Life Storage and Mapletree Logistics go up and down completely randomly.
Pair Corralation between Life Storage and Mapletree Logistics
Considering the 90-day investment horizon Life Storage is expected to generate 0.49 times more return on investment than Mapletree Logistics. However, Life Storage is 2.04 times less risky than Mapletree Logistics. It trades about 0.1 of its potential returns per unit of risk. Mapletree Logistics Trust is currently generating about 0.02 per unit of risk. If you would invest 10,220 in Life Storage on August 26, 2024 and sell it today you would earn a total of 3,090 from holding Life Storage or generate 30.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 44.57% |
| Values | Daily Returns |
Life Storage vs. Mapletree Logistics Trust
Performance |
| Timeline |
| Life Storage |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Mapletree Logistics Trust |
Life Storage and Mapletree Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Life Storage and Mapletree Logistics
The main advantage of trading using opposite Life Storage and Mapletree Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Life Storage position performs unexpectedly, Mapletree Logistics 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 Mapletree Logistics will offset losses from the drop in Mapletree Logistics' long position.| Life Storage vs. Public Storage | Life Storage vs. CubeSmart | Life Storage vs. National Storage Affiliates | Life Storage vs. Prologis |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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