Correlation Between CENTURIA OFFICE and Extra Space

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

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

Diversification Opportunities for CENTURIA OFFICE and Extra Space

0.2

Correlation Coefficient

CENTURIA OFFICE  Extra Space

Modest diversification

The 3 months correlation between CENTURIA and Extra is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT 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 CENTURIA OFFICE 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 CENTURIA OFFICE REIT 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 CENTURIA OFFICE i.e., CENTURIA OFFICE and Extra Space go up and down completely randomly.

Pair Corralation between CENTURIA OFFICE and Extra Space

Assuming the 90 days horizon CENTURIA OFFICE is expected to generate 1.88 times less return on investment than Extra Space. But when comparing it to its historical volatility, CENTURIA OFFICE REIT is 1.07 times less risky than Extra Space. It trades about 0.01 of its potential returns per unit of risk. Extra Space Storage is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  11,002  in Extra Space Storage on May 5, 2025 and sell it today you would earn a total of  658.00  from holding Extra Space Storage or generate 5.98% return on investment over 90 days.

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

CENTURIA OFFICE REIT  vs.  Extra Space Storage

CENTURIA OFFICE REIT

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CENTURIA OFFICE REIT are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, CENTURIA OFFICE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

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. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with CENTURIA OFFICE and Extra Space

The main advantage of trading using opposite CENTURIA OFFICE and Extra Space positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE 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 CENTURIA OFFICE REIT 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.