Correlation Between Public Storage and Sparebank
Can any of the company-specific risk be diversified away by investing in both Public Storage and Sparebank 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 Sparebank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and Sparebank 1 SR, you can compare the effects of market volatilities on Public Storage and Sparebank 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 Sparebank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and Sparebank.
Diversification Opportunities for Public Storage and Sparebank
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Public and Sparebank is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and Sparebank 1 SR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparebank 1 SR 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 Sparebank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparebank 1 SR has no effect on the direction of Public Storage i.e., Public Storage and Sparebank go up and down completely randomly.
Pair Corralation between Public Storage and Sparebank
Assuming the 90 days trading horizon Public Storage is expected to under-perform the Sparebank. In addition to that, Public Storage is 1.35 times more volatile than Sparebank 1 SR. It trades about -0.12 of its total potential returns per unit of risk. Sparebank 1 SR is currently generating about 0.1 per unit of volatility. If you would invest 14,460 in Sparebank 1 SR on October 24, 2024 and sell it today you would earn a total of 920.00 from holding Sparebank 1 SR or generate 6.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.39% |
| Values | Daily Returns |
Public Storage vs. Sparebank 1 SR
Performance |
| Timeline |
| Public Storage |
| Sparebank 1 SR |
Public Storage and Sparebank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and Sparebank
The main advantage of trading using opposite Public Storage and Sparebank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, Sparebank 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 Sparebank will offset losses from the drop in Sparebank's long position.| Public Storage vs. Alliance Data Systems | Public Storage vs. Vienna Insurance Group | Public Storage vs. Batm Advanced Communications | Public Storage vs. Extra Space Storage |
| Sparebank vs. Dentsply Sirona | Sparebank vs. Air Products Chemicals | Sparebank vs. Gaztransport et Technigaz | Sparebank vs. GreenX Metals |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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