Correlation Between Public Storage and Discover Financial
Can any of the company-specific risk be diversified away by investing in both Public Storage and Discover Financial 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 Discover Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and Discover Financial Services, you can compare the effects of market volatilities on Public Storage and Discover Financial 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 Discover Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and Discover Financial.
Diversification Opportunities for Public Storage and Discover Financial
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Public and Discover is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and Discover Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Discover Financial 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 Discover Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Discover Financial has no effect on the direction of Public Storage i.e., Public Storage and Discover Financial go up and down completely randomly.
Pair Corralation between Public Storage and Discover Financial
Assuming the 90 days trading horizon Public Storage is expected to generate 4.21 times less return on investment than Discover Financial. But when comparing it to its historical volatility, Public Storage is 1.6 times less risky than Discover Financial. It trades about 0.04 of its potential returns per unit of risk. Discover Financial Services is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 10,660 in Discover Financial Services on September 14, 2024 and sell it today you would earn a total of 7,120 from holding Discover Financial Services or generate 66.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 97.99% |
| Values | Daily Returns |
Public Storage vs. Discover Financial Services
Performance |
| Timeline |
| Public Storage |
| Discover Financial |
Public Storage and Discover Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and Discover Financial
The main advantage of trading using opposite Public Storage and Discover Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, Discover Financial 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 Discover Financial will offset losses from the drop in Discover Financial'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 |
| Discover Financial vs. Dolly Varden Silver | Discover Financial vs. Ironveld Plc | Discover Financial vs. Baker Steel Resources | Discover Financial vs. Endeavour Mining Corp |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |