Correlation Between Public Storage and Lowe Cos
Can any of the company-specific risk be diversified away by investing in both Public Storage and Lowe Cos 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 Lowe Cos into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and Lowe Cos, you can compare the effects of market volatilities on Public Storage and Lowe Cos 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 Lowe Cos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and Lowe Cos.
Diversification Opportunities for Public Storage and Lowe Cos
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Public and Lowe is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and Lowe Cos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lowe Cos 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 Lowe Cos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lowe Cos has no effect on the direction of Public Storage i.e., Public Storage and Lowe Cos go up and down completely randomly.
Pair Corralation between Public Storage and Lowe Cos
Assuming the 90 days trading horizon Public Storage is expected to generate 1.07 times less return on investment than Lowe Cos. But when comparing it to its historical volatility, Public Storage is 1.01 times less risky than Lowe Cos. It trades about 0.04 of its potential returns per unit of risk. Lowe Cos is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 22,373 in Lowe Cos on September 12, 2024 and sell it today you would earn a total of 4,860 from holding Lowe Cos or generate 21.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Public Storage vs. Lowe Cos
Performance |
| Timeline |
| Public Storage |
| Lowe Cos |
Public Storage and Lowe Cos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and Lowe Cos
The main advantage of trading using opposite Public Storage and Lowe Cos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, Lowe Cos 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 Lowe Cos will offset losses from the drop in Lowe Cos' 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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