Correlation Between Scheerders Van and Shurgard Self

Can any of the company-specific risk be diversified away by investing in both Scheerders Van and Shurgard Self 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 Scheerders Van and Shurgard Self into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Scheerders van Kerchoves and Shurgard Self Storage, you can compare the effects of market volatilities on Scheerders Van and Shurgard Self 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 Scheerders Van with a short position of Shurgard Self. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scheerders Van and Shurgard Self.

Diversification Opportunities for Scheerders Van and Shurgard Self

-0.52

Correlation Coefficient

Scheerders Van  Shurgard Self

Excellent diversification

The 3 months correlation between Scheerders and Shurgard is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Scheerders van Kerchoves and Shurgard Self Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shurgard Self Storage and Scheerders Van 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 Scheerders van Kerchoves are associated (or correlated) with Shurgard Self. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shurgard Self Storage has no effect on the direction of Scheerders Van i.e., Scheerders Van and Shurgard Self go up and down completely randomly.

Pair Corralation between Scheerders Van and Shurgard Self

Assuming the 90 days trading horizon Scheerders van Kerchoves is expected to generate 3.59 times more return on investment than Shurgard Self. However, Scheerders Van is 3.59 times more volatile than Shurgard Self Storage. It trades about 0.11 of its potential returns per unit of risk. Shurgard Self Storage is currently generating about -0.16 per unit of risk. If you would invest  26,000  in Scheerders van Kerchoves on September 15, 2024 and sell it today you would earn a total of  8,600  from holding Scheerders van Kerchoves or generate 33.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Scheerders van Kerchoves  vs.  Shurgard Self Storage

Scheerders van Kerchoves

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Scheerders van Kerchoves are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Scheerders Van reported solid returns over the last few months and may actually be approaching a breakup point.

Shurgard Self Storage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shurgard Self Storage has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Scheerders Van and Shurgard Self

The main advantage of trading using opposite Scheerders Van and Shurgard Self positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scheerders Van position performs unexpectedly, Shurgard Self 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 Shurgard Self will offset losses from the drop in Shurgard Self's long position.

The idea behind Scheerders van Kerchoves and Shurgard Self 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.