Correlation Between Sibanye Stillwater and Extra Space
Can any of the company-specific risk be diversified away by investing in both Sibanye Stillwater 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 Sibanye Stillwater and Extra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sibanye Stillwater Limited and Extra Space Storage, you can compare the effects of market volatilities on Sibanye Stillwater 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 Sibanye Stillwater with a short position of Extra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sibanye Stillwater and Extra Space.
Diversification Opportunities for Sibanye Stillwater and Extra Space
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sibanye and Extra is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Sibanye Stillwater Limited 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 Sibanye Stillwater 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 Sibanye Stillwater Limited 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 Sibanye Stillwater i.e., Sibanye Stillwater and Extra Space go up and down completely randomly.
Pair Corralation between Sibanye Stillwater and Extra Space
Assuming the 90 days trading horizon Sibanye Stillwater Limited is expected to generate 1.39 times more return on investment than Extra Space. However, Sibanye Stillwater is 1.39 times more volatile than Extra Space Storage. It trades about 0.1 of its potential returns per unit of risk. Extra Space Storage is currently generating about 0.04 per unit of risk. If you would invest 1,130 in Sibanye Stillwater Limited on September 13, 2024 and sell it today you would earn a total of 175.00 from holding Sibanye Stillwater Limited or generate 15.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Sibanye Stillwater Limited vs. Extra Space Storage
Performance |
| Timeline |
| Sibanye Stillwater |
| Extra Space Storage |
Sibanye Stillwater and Extra Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sibanye Stillwater and Extra Space
The main advantage of trading using opposite Sibanye Stillwater and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sibanye Stillwater 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.| Sibanye Stillwater vs. Extra Space Storage | Sibanye Stillwater vs. Paycom Software | Sibanye Stillwater vs. Tres Tentos Agroindustrial | Sibanye Stillwater vs. Take Two Interactive Software |
| 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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