Correlation Between Public Storage and Lendinvest PLC
Can any of the company-specific risk be diversified away by investing in both Public Storage and Lendinvest PLC 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 Lendinvest PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and Lendinvest PLC, you can compare the effects of market volatilities on Public Storage and Lendinvest PLC 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 Lendinvest PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and Lendinvest PLC.
Diversification Opportunities for Public Storage and Lendinvest PLC
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Public and Lendinvest is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and Lendinvest PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lendinvest PLC 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 Lendinvest PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lendinvest PLC has no effect on the direction of Public Storage i.e., Public Storage and Lendinvest PLC go up and down completely randomly.
Pair Corralation between Public Storage and Lendinvest PLC
Assuming the 90 days trading horizon Public Storage is expected to generate 0.9 times more return on investment than Lendinvest PLC. However, Public Storage is 1.12 times less risky than Lendinvest PLC. It trades about 0.11 of its potential returns per unit of risk. Lendinvest PLC is currently generating about -0.02 per unit of risk. If you would invest 23,964 in Public Storage on September 1, 2024 and sell it today you would earn a total of 11,099 from holding Public Storage or generate 46.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.26% |
| Values | Daily Returns |
Public Storage vs. Lendinvest PLC
Performance |
| Timeline |
| Public Storage |
| Lendinvest PLC |
Public Storage and Lendinvest PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and Lendinvest PLC
The main advantage of trading using opposite Public Storage and Lendinvest PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, Lendinvest PLC 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 Lendinvest PLC will offset losses from the drop in Lendinvest PLC's long position.| Public Storage vs. Uniper SE | Public Storage vs. Mulberry Group PLC | Public Storage vs. London Security Plc | Public Storage vs. Triad Group PLC |
| Lendinvest PLC vs. Samsung Electronics Co | Lendinvest PLC vs. Samsung Electronics Co | Lendinvest PLC vs. Toyota Motor Corp | Lendinvest PLC vs. Reliance Industries Ltd |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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