Correlation Between Extra Space and Abrdn Property

Can any of the company-specific risk be diversified away by investing in both Extra Space and Abrdn Property 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 Abrdn Property 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 abrdn Property Income, you can compare the effects of market volatilities on Extra Space and Abrdn Property 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 Abrdn Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Extra Space and Abrdn Property.

Diversification Opportunities for Extra Space and Abrdn Property

-0.61

Correlation Coefficient

Extra Space  Abrdn Property

Excellent diversification

The 3 months correlation between Extra and Abrdn is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and abrdn Property Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on abrdn Property Income 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 Abrdn Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of abrdn Property Income has no effect on the direction of Extra Space i.e., Extra Space and Abrdn Property go up and down completely randomly.

Pair Corralation between Extra Space and Abrdn Property

Assuming the 90 days trading horizon Extra Space Storage is expected to generate 0.49 times more return on investment than Abrdn Property. However, Extra Space Storage is 2.04 times less risky than Abrdn Property. It trades about 0.04 of its potential returns per unit of risk. abrdn Property Income is currently generating about -0.08 per unit of risk. If you would invest  14,374  in Extra Space Storage on April 23, 2025 and sell it today you would earn a total of  453.00  from holding Extra Space Storage or generate 3.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Extra Space Storage  vs.  abrdn Property Income

Extra Space Storage

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Extra Space Storage are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Extra Space is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

abrdn Property Income

Risk-Adjusted Performance

Very Weak

Over the last 90 days abrdn Property Income has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Extra Space and Abrdn Property

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

The idea behind Extra Space Storage and abrdn Property Income 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.