Correlation Between Extra Space and Trade Desk
Can any of the company-specific risk be diversified away by investing in both Extra Space and Trade Desk 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 Extra Space and Trade Desk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Extra Space Storage and The Trade Desk, you can compare the effects of market volatilities on Extra Space and Trade Desk 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 Extra Space with a short position of Trade Desk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Trade Desk.
Diversification Opportunities for Extra Space and Trade Desk
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Extra and Trade is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and The Trade Desk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trade Desk and Extra Space 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 Extra Space Storage are associated (or correlated) with Trade Desk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trade Desk has no effect on the direction of Extra Space i.e., Extra Space and Trade Desk go up and down completely randomly.
Pair Corralation between Extra Space and Trade Desk
Assuming the 90 days trading horizon Extra Space is expected to generate 5.12 times less return on investment than Trade Desk. But when comparing it to its historical volatility, Extra Space Storage is 1.34 times less risky than Trade Desk. It trades about 0.03 of its potential returns per unit of risk. The Trade Desk is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 539.00 in The Trade Desk on September 24, 2024 and sell it today you would earn a total of 221.00 from holding The Trade Desk or generate 41.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Extra Space Storage vs. The Trade Desk
Performance |
Timeline |
Extra Space Storage |
Trade Desk |
Extra Space and Trade Desk Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Extra Space and Trade Desk
The main advantage of trading using opposite Extra Space and Trade Desk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Extra Space position performs unexpectedly, Trade Desk 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 Trade Desk will offset losses from the drop in Trade Desk's long position.Extra Space vs. GP Investments | Extra Space vs. Iron Mountain Incorporated | Extra Space vs. Brpr Corporate Offices | Extra Space vs. Unity Software |
Trade Desk vs. Take Two Interactive Software | Trade Desk vs. Lupatech SA | Trade Desk vs. Palantir Technologies | Trade Desk vs. Unity Software |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
Commodity Directory Find actively traded commodities issued by global exchanges | |
Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |