Correlation Between NYSE Composite and Safestore Holdings
Can any of the company-specific risk be diversified away by investing in both NYSE Composite and Safestore Holdings 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 NYSE Composite and Safestore Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Safestore Holdings plc, you can compare the effects of market volatilities on NYSE Composite and Safestore Holdings 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 NYSE Composite with a short position of Safestore Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Safestore Holdings.
Diversification Opportunities for NYSE Composite and Safestore Holdings
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Safestore is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite and Safestore Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safestore Holdings plc and NYSE Composite 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 NYSE Composite are associated (or correlated) with Safestore Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safestore Holdings plc has no effect on the direction of NYSE Composite i.e., NYSE Composite and Safestore Holdings go up and down completely randomly.
Pair Corralation between NYSE Composite and Safestore Holdings
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.26 times more return on investment than Safestore Holdings. However, NYSE Composite is 3.89 times less risky than Safestore Holdings. It trades about 0.24 of its potential returns per unit of risk. Safestore Holdings plc is currently generating about -0.31 per unit of risk. If you would invest 1,954,967 in NYSE Composite on August 29, 2024 and sell it today you would earn a total of 66,978 from holding NYSE Composite or generate 3.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Safestore Holdings plc
Performance |
| Timeline |
NYSE Composite and Safestore Holdings Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Safestore Holdings plc
Pair trading matchups for Safestore Holdings
Pair Trading with NYSE Composite and Safestore Holdings
The main advantage of trading using opposite NYSE Composite and Safestore Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite position performs unexpectedly, Safestore Holdings 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 Safestore Holdings will offset losses from the drop in Safestore Holdings' long position.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| Safestore Holdings vs. Copa Holdings SA | Safestore Holdings vs. United Airlines Holdings | Safestore Holdings vs. Delta Air Lines | Safestore Holdings vs. SkyWest |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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