Correlation Between Clave Indices and Extra Space

Can any of the company-specific risk be diversified away by investing in both Clave Indices 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 Clave Indices and Extra Space into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Clave Indices De and Extra Space Storage, you can compare the effects of market volatilities on Clave Indices 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 Clave Indices with a short position of Extra Space. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clave Indices and Extra Space.

Diversification Opportunities for Clave Indices and Extra Space

-0.07

Correlation Coefficient

Clave Indices  Extra Space

Good diversification

The 3 months correlation between Clave and Extra is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Clave Indices De 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 Clave Indices 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 Clave Indices De 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 Clave Indices i.e., Clave Indices and Extra Space go up and down completely randomly.

Pair Corralation between Clave Indices and Extra Space

Assuming the 90 days trading horizon Clave Indices De is expected to generate 0.89 times more return on investment than Extra Space. However, Clave Indices De is 1.12 times less risky than Extra Space. It trades about 0.15 of its potential returns per unit of risk. Extra Space Storage is currently generating about -0.13 per unit of risk. If you would invest  7,657  in Clave Indices De on December 25, 2024 and sell it today you would earn a total of  1,043  from holding Clave Indices De or generate 13.62% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

Clave Indices De  vs.  Extra Space Storage

Clave Indices De

Risk-Adjusted Performance

Good

Over the last 90 days Clave Indices De has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat weak forward indicators, Clave Indices sustained solid returns over the last few months and may actually be approaching a breakup point.

Extra Space Storage

Risk-Adjusted Performance

Very Weak

Over the last 90 days Extra Space Storage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Clave Indices and Extra Space

The main advantage of trading using opposite Clave Indices and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clave Indices 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 Clave Indices De 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.

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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.