Correlation Between Southern Copper and Public Storage
Can any of the company-specific risk be diversified away by investing in both Southern Copper and Public Storage 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 Southern Copper and Public Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Southern Copper Corp and Public Storage, you can compare the effects of market volatilities on Southern Copper and Public Storage 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 Southern Copper with a short position of Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Southern Copper and Public Storage.
Diversification Opportunities for Southern Copper and Public Storage
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Southern and Public is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Southern Copper Corp and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage and Southern Copper 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 Southern Copper Corp are associated (or correlated) with Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of Southern Copper i.e., Southern Copper and Public Storage go up and down completely randomly.
Pair Corralation between Southern Copper and Public Storage
Assuming the 90 days trading horizon Southern Copper Corp is expected to generate 3.99 times more return on investment than Public Storage. However, Southern Copper is 3.99 times more volatile than Public Storage. It trades about 0.04 of its potential returns per unit of risk. Public Storage is currently generating about 0.04 per unit of risk. If you would invest 5,536 in Southern Copper Corp on August 25, 2024 and sell it today you would earn a total of 4,476 from holding Southern Copper Corp or generate 80.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.38% |
| Values | Daily Returns |
Southern Copper Corp vs. Public Storage
Performance |
| Timeline |
| Southern Copper Corp |
| Public Storage |
Southern Copper and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Southern Copper and Public Storage
The main advantage of trading using opposite Southern Copper and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Southern Copper position performs unexpectedly, Public Storage 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 Public Storage will offset losses from the drop in Public Storage's long position.| Southern Copper vs. Public Storage | Southern Copper vs. Gamma Communications PLC | Southern Copper vs. X FAB Silicon Foundries | Southern Copper vs. Westlake Chemical Corp |
| Public Storage vs. Dolly Varden Silver | Public Storage vs. Blackrock World Mining | Public Storage vs. iShares Physical Silver | Public Storage vs. Air Products Chemicals |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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