Correlation Between Advanced Micro and Public Storage
Can any of the company-specific risk be diversified away by investing in both Advanced Micro 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 Advanced Micro and Public Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Micro Devices and Public Storage, you can compare the effects of market volatilities on Advanced Micro 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 Advanced Micro with a short position of Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Micro and Public Storage.
Diversification Opportunities for Advanced Micro and Public Storage
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Advanced and Public is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Micro Devices and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage and Advanced Micro 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 Advanced Micro Devices 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 Advanced Micro i.e., Advanced Micro and Public Storage go up and down completely randomly.
Pair Corralation between Advanced Micro and Public Storage
Assuming the 90 days trading horizon Advanced Micro Devices is expected to under-perform the Public Storage. In addition to that, Advanced Micro is 2.6 times more volatile than Public Storage. It trades about -0.11 of its total potential returns per unit of risk. Public Storage is currently generating about -0.21 per unit of volatility. If you would invest 37,500 in Public Storage on October 25, 2024 and sell it today you would lose (1,356) from holding Public Storage or give up 3.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Micro Devices vs. Public Storage
Performance |
| Timeline |
| Advanced Micro Devices |
| Public Storage |
Advanced Micro and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Micro and Public Storage
The main advantage of trading using opposite Advanced Micro and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Micro 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.| Advanced Micro vs. Public Storage | Advanced Micro vs. Unifique Telecomunicaes SA | Advanced Micro vs. Automatic Data Processing | Advanced Micro vs. Zoom Video Communications |
| Public Storage vs. Mitsubishi UFJ Financial | Public Storage vs. Deutsche Bank Aktiengesellschaft | Public Storage vs. SVB Financial Group | Public Storage vs. HDFC Bank Limited |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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