Correlation Between Public Storage and Occidental Petroleum
Can any of the company-specific risk be diversified away by investing in both Public Storage and Occidental Petroleum 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 Occidental Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and Occidental Petroleum Corp, you can compare the effects of market volatilities on Public Storage and Occidental Petroleum 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 Occidental Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and Occidental Petroleum.
Diversification Opportunities for Public Storage and Occidental Petroleum
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Public and Occidental is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and Occidental Petroleum Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Occidental Petroleum Corp 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 Occidental Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Occidental Petroleum Corp has no effect on the direction of Public Storage i.e., Public Storage and Occidental Petroleum go up and down completely randomly.
Pair Corralation between Public Storage and Occidental Petroleum
Assuming the 90 days trading horizon Public Storage is expected to generate 0.84 times more return on investment than Occidental Petroleum. However, Public Storage is 1.2 times less risky than Occidental Petroleum. It trades about 0.04 of its potential returns per unit of risk. Occidental Petroleum Corp is currently generating about -0.01 per unit of risk. If you would invest 26,568 in Public Storage on August 24, 2024 and sell it today you would earn a total of 7,123 from holding Public Storage or generate 26.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.97% |
| Values | Daily Returns |
Public Storage vs. Occidental Petroleum Corp
Performance |
| Timeline |
| Public Storage |
| Occidental Petroleum Corp |
Public Storage and Occidental Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and Occidental Petroleum
The main advantage of trading using opposite Public Storage and Occidental Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, Occidental Petroleum 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 Occidental Petroleum will offset losses from the drop in Occidental Petroleum's long position.| Public Storage vs. Quadrise Plc | Public Storage vs. Intuitive Investments Group | Public Storage vs. European Metals Holdings | Public Storage vs. Athelney Trust plc |
| Occidental Petroleum vs. Public Storage | Occidental Petroleum vs. InterContinental Hotels Group | Occidental Petroleum vs. United Internet AG | Occidental Petroleum vs. Wyndham Hotels Resorts |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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