Correlation Between Extra Space and Western Copper

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

Diversification Opportunities for Extra Space and Western Copper

-0.25

Correlation Coefficient

Extra Space  Western Copper

Very good diversification

The 3 months correlation between Extra and Western is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Extra Space Storage and Western Copper and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Western Copper 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 Western Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Western Copper has no effect on the direction of Extra Space i.e., Extra Space and Western Copper go up and down completely randomly.

Pair Corralation between Extra Space and Western Copper

Assuming the 90 days trading horizon Extra Space is expected to generate 2.72 times less return on investment than Western Copper. But when comparing it to its historical volatility, Extra Space Storage is 2.71 times less risky than Western Copper. It trades about 0.06 of its potential returns per unit of risk. Western Copper and is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  98.00  in Western Copper and on April 24, 2025 and sell it today you would earn a total of  9.00  from holding Western Copper and or generate 9.18% return on investment over 90 days.

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

Extra Space Storage  vs.  Western Copper and

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 4 (%) 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 latest stock price uproar, may contribute to short-horizon losses for the private investors.

Western Copper

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Western Copper and are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Western Copper may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Extra Space and Western Copper

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

The idea behind Extra Space Storage and Western Copper and 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.