Correlation Between Public Storage and Novavax
Can any of the company-specific risk be diversified away by investing in both Public Storage and Novavax 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 Public Storage and Novavax into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and Novavax, you can compare the effects of market volatilities on Public Storage and Novavax 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 Public Storage with a short position of Novavax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and Novavax.
Diversification Opportunities for Public Storage and Novavax
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Public and Novavax is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and Novavax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novavax and Public Storage 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 Public Storage are associated (or correlated) with Novavax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novavax has no effect on the direction of Public Storage i.e., Public Storage and Novavax go up and down completely randomly.
Pair Corralation between Public Storage and Novavax
Assuming the 90 days trading horizon Public Storage is expected to generate 28.37 times less return on investment than Novavax. But when comparing it to its historical volatility, Public Storage is 18.42 times less risky than Novavax. It trades about 0.08 of its potential returns per unit of risk. Novavax is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 768.00 in Novavax on September 14, 2024 and sell it today you would earn a total of 422.00 from holding Novavax or generate 54.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.26% |
| Values | Daily Returns |
Public Storage vs. Novavax
Performance |
| Timeline |
| Public Storage |
| Novavax |
Public Storage and Novavax Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and Novavax
The main advantage of trading using opposite Public Storage and Novavax positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, Novavax 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 Novavax will offset losses from the drop in Novavax's long position.| Public Storage vs. Hilton Food Group | Public Storage vs. Ebro Foods | Public Storage vs. Grieg Seafood | Public Storage vs. Edita Food Industries |
| Novavax vs. GlobalData PLC | Novavax vs. Cars Inc | Novavax vs. Fidelity National Information | Novavax vs. Public Storage |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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