Correlation Between Public Storage and JLEN Environmental
Can any of the company-specific risk be diversified away by investing in both Public Storage and JLEN Environmental 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 JLEN Environmental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and JLEN Environmental Assets, you can compare the effects of market volatilities on Public Storage and JLEN Environmental 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 JLEN Environmental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and JLEN Environmental.
Diversification Opportunities for Public Storage and JLEN Environmental
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Public and JLEN is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and JLEN Environmental Assets in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JLEN Environmental Assets 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 JLEN Environmental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JLEN Environmental Assets has no effect on the direction of Public Storage i.e., Public Storage and JLEN Environmental go up and down completely randomly.
Pair Corralation between Public Storage and JLEN Environmental
Assuming the 90 days trading horizon Public Storage is expected to generate 1.19 times more return on investment than JLEN Environmental. However, Public Storage is 1.19 times more volatile than JLEN Environmental Assets. It trades about 0.08 of its potential returns per unit of risk. JLEN Environmental Assets is currently generating about -0.04 per unit of risk. If you would invest 24,768 in Public Storage on September 14, 2024 and sell it today you would earn a total of 7,245 from holding Public Storage or generate 29.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.15% |
| Values | Daily Returns |
Public Storage vs. JLEN Environmental Assets
Performance |
| Timeline |
| Public Storage |
| JLEN Environmental Assets |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Public Storage and JLEN Environmental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and JLEN Environmental
The main advantage of trading using opposite Public Storage and JLEN Environmental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, JLEN Environmental 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 JLEN Environmental will offset losses from the drop in JLEN Environmental's long position.| Public Storage vs. Hilton Food Group | Public Storage vs. Ebro Foods | Public Storage vs. Grieg Seafood | Public Storage vs. Edita Food Industries |
| JLEN Environmental vs. Ebro Foods | JLEN Environmental vs. Edita Food Industries | JLEN Environmental vs. Premier Foods PLC | JLEN Environmental vs. Public Storage |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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