Correlation Between Lupatech and Extra Space

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Lupatech 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 Lupatech and Extra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lupatech SA and Extra Space Storage, you can compare the effects of market volatilities on Lupatech 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 Lupatech with a short position of Extra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lupatech and Extra Space.

Diversification Opportunities for Lupatech and Extra Space

-0.12
  Correlation Coefficient

Good diversification

The 3 months correlation between Lupatech and Extra is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Lupatech SA 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 Lupatech 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 Lupatech SA 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 Lupatech i.e., Lupatech and Extra Space go up and down completely randomly.

Pair Corralation between Lupatech and Extra Space

Assuming the 90 days trading horizon Lupatech SA is expected to under-perform the Extra Space. In addition to that, Lupatech is 1.22 times more volatile than Extra Space Storage. It trades about -0.09 of its total potential returns per unit of risk. Extra Space Storage is currently generating about 0.16 per unit of volatility. If you would invest  23,000  in Extra Space Storage on September 5, 2024 and sell it today you would earn a total of  3,806  from holding Extra Space Storage or generate 16.55% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Lupatech SA  vs.  Extra Space Storage

 Performance 
       Timeline  
Lupatech SA 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Lupatech SA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
Extra Space Storage 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Extra Space Storage are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Extra Space may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Lupatech and Extra Space Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Lupatech and Extra Space

The main advantage of trading using opposite Lupatech and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lupatech 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.
The idea behind Lupatech SA and Extra Space Storage pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.

Other Complementary Tools

Price Ceiling Movement
Calculate and plot Price Ceiling Movement for different equity instruments
CEOs Directory
Screen CEOs from public companies around the world
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Idea Optimizer
Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio
Stocks Directory
Find actively traded stocks across global markets