Correlation Between Retail Estates and Shurgard Self
Can any of the company-specific risk be diversified away by investing in both Retail Estates and Shurgard Self 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 Retail Estates and Shurgard Self into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Retail Estates and Shurgard Self Storage, you can compare the effects of market volatilities on Retail Estates and Shurgard Self 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 Retail Estates with a short position of Shurgard Self. Check out your portfolio center. Please also check ongoing floating volatility patterns of Retail Estates and Shurgard Self.
Diversification Opportunities for Retail Estates and Shurgard Self
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Retail and Shurgard is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Retail Estates and Shurgard Self Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shurgard Self Storage and Retail Estates 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 Retail Estates are associated (or correlated) with Shurgard Self. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shurgard Self Storage has no effect on the direction of Retail Estates i.e., Retail Estates and Shurgard Self go up and down completely randomly.
Pair Corralation between Retail Estates and Shurgard Self
Assuming the 90 days trading horizon Retail Estates is expected to under-perform the Shurgard Self. But the stock apears to be less risky and, when comparing its historical volatility, Retail Estates is 1.65 times less risky than Shurgard Self. The stock trades about -0.17 of its potential returns per unit of risk. The Shurgard Self Storage is currently generating about -0.09 of returns per unit of risk over similar time horizon. If you would invest 4,095 in Shurgard Self Storage on October 26, 2024 and sell it today you would lose (375.00) from holding Shurgard Self Storage or give up 9.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Retail Estates vs. Shurgard Self Storage
Performance |
| Timeline |
| Retail Estates |
| Shurgard Self Storage |
Retail Estates and Shurgard Self Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Retail Estates and Shurgard Self
The main advantage of trading using opposite Retail Estates and Shurgard Self positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Retail Estates position performs unexpectedly, Shurgard Self 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 Shurgard Self will offset losses from the drop in Shurgard Self's long position.| Retail Estates vs. Cofinimmo SA | Retail Estates vs. Warehouses de Pauw | Retail Estates vs. Montea CVA | Retail Estates vs. Aedifica |
| Shurgard Self vs. VGP NV | Shurgard Self vs. Warehouses de Pauw | Shurgard Self vs. Xior Student Housing | Shurgard Self vs. Aedifica |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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