Correlation Between Shurgard Self and BEL-20 INDEX
Can any of the company-specific risk be diversified away by investing in both Shurgard Self and BEL-20 INDEX 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 Shurgard Self and BEL-20 INDEX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shurgard Self Storage and BEL-20 INDEX, you can compare the effects of market volatilities on Shurgard Self and BEL-20 INDEX 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 Shurgard Self with a short position of BEL-20 INDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shurgard Self and BEL-20 INDEX.
Diversification Opportunities for Shurgard Self and BEL-20 INDEX
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shurgard and BEL-20 is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Shurgard Self Storage and BEL-20 INDEX in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BEL-20 INDEX and Shurgard Self 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 Shurgard Self Storage are associated (or correlated) with BEL-20 INDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BEL-20 INDEX has no effect on the direction of Shurgard Self i.e., Shurgard Self and BEL-20 INDEX go up and down completely randomly.
Pair Corralation between Shurgard Self and BEL-20 INDEX
Assuming the 90 days trading horizon Shurgard Self Storage is expected to under-perform the BEL-20 INDEX. In addition to that, Shurgard Self is 1.94 times more volatile than BEL-20 INDEX. It trades about -0.12 of its total potential returns per unit of risk. BEL-20 INDEX is currently generating about -0.08 per unit of volatility. If you would invest 430,150 in BEL-20 INDEX on August 27, 2024 and sell it today you would lose (7,321) from holding BEL-20 INDEX or give up 1.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shurgard Self Storage vs. BEL-20 INDEX
Performance |
| Timeline |
Shurgard Self and BEL-20 INDEX Volatility Contrast
Predicted Return Density |
| Returns |
Shurgard Self Storage
Pair trading matchups for Shurgard Self
BEL-20 INDEX
Pair trading matchups for BEL-20 INDEX
Pair Trading with Shurgard Self and BEL-20 INDEX
The main advantage of trading using opposite Shurgard Self and BEL-20 INDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shurgard Self position performs unexpectedly, BEL-20 INDEX 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 BEL-20 INDEX will offset losses from the drop in BEL-20 INDEX's long position.| Shurgard Self vs. VGP NV | Shurgard Self vs. Warehouses de Pauw | Shurgard Self vs. Xior Student Housing | Shurgard Self vs. Aedifica |
| BEL-20 INDEX vs. Retail Estates | BEL-20 INDEX vs. Shurgard Self Storage | BEL-20 INDEX vs. Vastned Retail Belgium | BEL-20 INDEX vs. Immolease Trust NV |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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