Correlation Between Public Storage and GoldMining
Can any of the company-specific risk be diversified away by investing in both Public Storage and GoldMining 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 GoldMining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and GoldMining, you can compare the effects of market volatilities on Public Storage and GoldMining 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 GoldMining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and GoldMining.
Diversification Opportunities for Public Storage and GoldMining
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Public and GoldMining is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and GoldMining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GoldMining 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 GoldMining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GoldMining has no effect on the direction of Public Storage i.e., Public Storage and GoldMining go up and down completely randomly.
Pair Corralation between Public Storage and GoldMining
Assuming the 90 days trading horizon Public Storage is expected to generate 0.41 times more return on investment than GoldMining. However, Public Storage is 2.46 times less risky than GoldMining. It trades about 0.17 of its potential returns per unit of risk. GoldMining is currently generating about 0.01 per unit of risk. If you would invest 26,741 in Public Storage on August 29, 2024 and sell it today you would earn a total of 8,580 from holding Public Storage or generate 32.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 50.39% |
| Values | Daily Returns |
Public Storage vs. GoldMining
Performance |
| Timeline |
| Public Storage |
| GoldMining |
Public Storage and GoldMining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and GoldMining
The main advantage of trading using opposite Public Storage and GoldMining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, GoldMining 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 GoldMining will offset losses from the drop in GoldMining's long position.| Public Storage vs. Lendinvest PLC | Public Storage vs. Neometals | Public Storage vs. Coor Service Management | Public Storage vs. Albion Technology General |
| GoldMining vs. Lendinvest PLC | GoldMining vs. Neometals | GoldMining vs. Coor Service Management | GoldMining vs. Albion Technology General |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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