Correlation Between Safestore Holdings and Terreno Realty
Can any of the company-specific risk be diversified away by investing in both Safestore Holdings and Terreno Realty 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 Terreno Realty 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 Terreno Realty, you can compare the effects of market volatilities on Safestore Holdings and Terreno Realty 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 Terreno Realty. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safestore Holdings and Terreno Realty.
Diversification Opportunities for Safestore Holdings and Terreno Realty
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Safestore and Terreno is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Safestore Holdings plc and Terreno Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Terreno Realty 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 Terreno Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Terreno Realty has no effect on the direction of Safestore Holdings i.e., Safestore Holdings and Terreno Realty go up and down completely randomly.
Pair Corralation between Safestore Holdings and Terreno Realty
Assuming the 90 days horizon Safestore Holdings plc is expected to under-perform the Terreno Realty. In addition to that, Safestore Holdings is 2.39 times more volatile than Terreno Realty. It trades about -0.3 of its total potential returns per unit of risk. Terreno Realty is currently generating about 0.0 per unit of volatility. If you would invest 6,067 in Terreno Realty on September 3, 2024 and sell it today you would lose (4.00) from holding Terreno Realty or give up 0.07% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Safestore Holdings plc vs. Terreno Realty
Performance |
| Timeline |
| Safestore Holdings plc |
| Terreno Realty |
Safestore Holdings and Terreno Realty Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safestore Holdings and Terreno Realty
The main advantage of trading using opposite Safestore Holdings and Terreno Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safestore Holdings position performs unexpectedly, Terreno Realty 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 Terreno Realty will offset losses from the drop in Terreno Realty's long position.| Safestore Holdings vs. Apple Inc | Safestore Holdings vs. Microsoft | Safestore Holdings vs. Amazon Inc | Safestore Holdings vs. Alphabet Inc Class C |
| Terreno Realty vs. Plymouth Industrial REIT | Terreno Realty vs. EastGroup Properties | Terreno Realty vs. LXP Industrial Trust | Terreno Realty 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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