Correlation Between GoldMining and Public Storage
Can any of the company-specific risk be diversified away by investing in both GoldMining 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 GoldMining and Public Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GoldMining and Public Storage, you can compare the effects of market volatilities on GoldMining 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 GoldMining with a short position of Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of GoldMining and Public Storage.
Diversification Opportunities for GoldMining and Public Storage
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GoldMining and Public is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding GoldMining and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage and GoldMining 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 GoldMining 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 GoldMining i.e., GoldMining and Public Storage go up and down completely randomly.
Pair Corralation between GoldMining and Public Storage
Assuming the 90 days trading horizon GoldMining is expected to generate 1.01 times less return on investment than Public Storage. In addition to that, GoldMining is 2.46 times more volatile than Public Storage. It trades about 0.04 of its total potential returns per unit of risk. Public Storage is currently generating about 0.1 per unit of volatility. If you would invest 27,287 in Public Storage on September 1, 2024 and sell it today you would earn a total of 7,776 from holding Public Storage or generate 28.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 45.79% |
| Values | Daily Returns |
GoldMining vs. Public Storage
Performance |
| Timeline |
| GoldMining |
| Public Storage |
GoldMining and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GoldMining and Public Storage
The main advantage of trading using opposite GoldMining and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GoldMining 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.| GoldMining vs. Greenroc Mining PLC | GoldMining vs. Silvercorp Metals | GoldMining vs. Sydbank | GoldMining vs. AMG Advanced Metallurgical |
| Public Storage vs. Uniper SE | Public Storage vs. Mulberry Group PLC | Public Storage vs. London Security Plc | Public Storage vs. Triad Group PLC |
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 Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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