Correlation Between Public Storage and Interpublic Group
Can any of the company-specific risk be diversified away by investing in both Public Storage and Interpublic Group 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 Interpublic Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and Interpublic Group of, you can compare the effects of market volatilities on Public Storage and Interpublic Group 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 Interpublic Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and Interpublic Group.
Diversification Opportunities for Public Storage and Interpublic Group
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Public and Interpublic is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and Interpublic Group of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interpublic Group 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 Interpublic Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interpublic Group has no effect on the direction of Public Storage i.e., Public Storage and Interpublic Group go up and down completely randomly.
Pair Corralation between Public Storage and Interpublic Group
Assuming the 90 days trading horizon Public Storage is expected to under-perform the Interpublic Group. But the stock apears to be less risky and, when comparing its historical volatility, Public Storage is 1.88 times less risky than Interpublic Group. The stock trades about -0.14 of its potential returns per unit of risk. The Interpublic Group of is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,939 in Interpublic Group of on September 12, 2024 and sell it today you would earn a total of 97.00 from holding Interpublic Group of or generate 3.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Storage vs. Interpublic Group of
Performance |
| Timeline |
| Public Storage |
| Interpublic Group |
Public Storage and Interpublic Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and Interpublic Group
The main advantage of trading using opposite Public Storage and Interpublic Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, Interpublic Group 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 Interpublic Group will offset losses from the drop in Interpublic Group's long position.| Public Storage vs. Hong Kong Land | Public Storage vs. Neometals | Public Storage vs. Coor Service Management | Public Storage vs. Fidelity Sustainable USD |
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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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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