Correlation Between SCOR PK and Extra Space
Can any of the company-specific risk be diversified away by investing in both SCOR PK 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 SCOR PK and Extra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCOR PK and Extra Space Storage, you can compare the effects of market volatilities on SCOR PK 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 SCOR PK with a short position of Extra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCOR PK and Extra Space.
Diversification Opportunities for SCOR PK and Extra Space
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SCOR and Extra is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding SCOR PK 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 SCOR PK 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 SCOR PK 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 SCOR PK i.e., SCOR PK and Extra Space go up and down completely randomly.
Pair Corralation between SCOR PK and Extra Space
Assuming the 90 days horizon SCOR PK is expected to under-perform the Extra Space. In addition to that, SCOR PK is 1.61 times more volatile than Extra Space Storage. It trades about 0.0 of its total potential returns per unit of risk. Extra Space Storage is currently generating about 0.08 per unit of volatility. If you would invest 11,629 in Extra Space Storage on September 4, 2024 and sell it today you would earn a total of 5,344 from holding Extra Space Storage or generate 45.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.62% |
| Values | Daily Returns |
SCOR PK vs. Extra Space Storage
Performance |
| Timeline |
| SCOR PK |
| Extra Space Storage |
SCOR PK and Extra Space Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCOR PK and Extra Space
The main advantage of trading using opposite SCOR PK and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCOR PK 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 SCOR PK 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.| Extra Space vs. Prologis | Extra Space vs. EastGroup Properties | Extra Space vs. Rexford Industrial Realty | Extra Space vs. Plymouth Industrial REIT |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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