Correlation Between Safestore Holdings and Industrial Logistics
Can any of the company-specific risk be diversified away by investing in both Safestore Holdings and Industrial Logistics 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 Safestore Holdings and Industrial Logistics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Safestore Holdings plc and Industrial Logistics Properties, you can compare the effects of market volatilities on Safestore Holdings and Industrial Logistics 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 Safestore Holdings with a short position of Industrial Logistics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safestore Holdings and Industrial Logistics.
Diversification Opportunities for Safestore Holdings and Industrial Logistics
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Safestore and Industrial is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Safestore Holdings plc and Industrial Logistics Propertie in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Industrial Logistics and Safestore Holdings 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 Safestore Holdings plc are associated (or correlated) with Industrial Logistics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Industrial Logistics has no effect on the direction of Safestore Holdings i.e., Safestore Holdings and Industrial Logistics go up and down completely randomly.
Pair Corralation between Safestore Holdings and Industrial Logistics
Assuming the 90 days horizon Safestore Holdings plc is expected to under-perform the Industrial Logistics. In addition to that, Safestore Holdings is 1.36 times more volatile than Industrial Logistics Properties. It trades about -0.3 of its total potential returns per unit of risk. Industrial Logistics Properties is currently generating about 0.21 per unit of volatility. If you would invest 358.00 in Industrial Logistics Properties on September 3, 2024 and sell it today you would earn a total of 29.00 from holding Industrial Logistics Properties or generate 8.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safestore Holdings plc vs. Industrial Logistics Propertie
Performance |
| Timeline |
| Safestore Holdings plc |
| Industrial Logistics |
Safestore Holdings and Industrial Logistics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safestore Holdings and Industrial Logistics
The main advantage of trading using opposite Safestore Holdings and Industrial Logistics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safestore Holdings position performs unexpectedly, Industrial Logistics 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 Industrial Logistics will offset losses from the drop in Industrial Logistics' long position.| Safestore Holdings vs. Apple Inc | Safestore Holdings vs. Microsoft | Safestore Holdings vs. Amazon Inc | Safestore Holdings vs. Alphabet Inc Class C |
| Industrial Logistics vs. Terreno Realty | Industrial Logistics vs. LXP Industrial Trust | Industrial Logistics vs. Rexford Industrial Realty | Industrial Logistics vs. First Industrial Realty |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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