Correlation Between Public Storage and Iron Mountain
Can any of the company-specific risk be diversified away by investing in both Public Storage and Iron Mountain 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 Iron Mountain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and Iron Mountain, you can compare the effects of market volatilities on Public Storage and Iron Mountain 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 Iron Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and Iron Mountain.
Diversification Opportunities for Public Storage and Iron Mountain
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Public and Iron is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and Iron Mountain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron Mountain 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 Iron Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron Mountain has no effect on the direction of Public Storage i.e., Public Storage and Iron Mountain go up and down completely randomly.
Pair Corralation between Public Storage and Iron Mountain
Assuming the 90 days trading horizon Public Storage is expected to generate 2.5 times less return on investment than Iron Mountain. But when comparing it to its historical volatility, Public Storage is 1.18 times less risky than Iron Mountain. It trades about 0.05 of its potential returns per unit of risk. Iron Mountain is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 7,317 in Iron Mountain on October 12, 2024 and sell it today you would earn a total of 2,894 from holding Iron Mountain or generate 39.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.47% |
| Values | Daily Returns |
Public Storage vs. Iron Mountain
Performance |
| Timeline |
| Public Storage |
| Iron Mountain |
Public Storage and Iron Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and Iron Mountain
The main advantage of trading using opposite Public Storage and Iron Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, Iron Mountain 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 Iron Mountain will offset losses from the drop in Iron Mountain's long position.| Public Storage vs. EJF Investments | Public Storage vs. Primorus Investments plc | Public Storage vs. Delta Air Lines | Public Storage vs. Wizz Air Holdings |
| Iron Mountain vs. Tatton Asset Management | Iron Mountain vs. Public Storage | Iron Mountain vs. Playtech Plc | Iron Mountain vs. Taylor Maritime Investments |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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