Correlation Between Public Storage and CATLIN GROUP
Can any of the company-specific risk be diversified away by investing in both Public Storage and CATLIN GROUP 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 CATLIN GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and CATLIN GROUP , you can compare the effects of market volatilities on Public Storage and CATLIN GROUP 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 CATLIN GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and CATLIN GROUP.
Diversification Opportunities for Public Storage and CATLIN GROUP
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Public and CATLIN is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and CATLIN GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CATLIN GROUP 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 CATLIN GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CATLIN GROUP has no effect on the direction of Public Storage i.e., Public Storage and CATLIN GROUP go up and down completely randomly.
Pair Corralation between Public Storage and CATLIN GROUP
Assuming the 90 days trading horizon Public Storage is expected to generate 1.37 times less return on investment than CATLIN GROUP. In addition to that, Public Storage is 1.12 times more volatile than CATLIN GROUP . It trades about 0.03 of its total potential returns per unit of risk. CATLIN GROUP is currently generating about 0.05 per unit of volatility. If you would invest 6,900 in CATLIN GROUP on September 23, 2024 and sell it today you would earn a total of 2,500 from holding CATLIN GROUP or generate 36.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.0% |
| Values | Daily Returns |
Public Storage vs. CATLIN GROUP
Performance |
| Timeline |
| Public Storage |
| CATLIN GROUP |
Public Storage and CATLIN GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and CATLIN GROUP
The main advantage of trading using opposite Public Storage and CATLIN GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, CATLIN GROUP 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 CATLIN GROUP will offset losses from the drop in CATLIN GROUP's long position.| Public Storage vs. Premier Foods PLC | Public Storage vs. Eco Animal Health | Public Storage vs. Grieg Seafood | Public Storage vs. Naturhouse Health SA |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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