Correlation Between Agree Realty and Public Storage
Can any of the company-specific risk be diversified away by investing in both Agree Realty 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 Agree Realty and Public Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Agree Realty and Public Storage, you can compare the effects of market volatilities on Agree Realty 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 Agree Realty with a short position of Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Agree Realty and Public Storage.
Diversification Opportunities for Agree Realty and Public Storage
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Agree and Public is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Agree Realty and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage and Agree Realty 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 Agree Realty 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 Agree Realty i.e., Agree Realty and Public Storage go up and down completely randomly.
Pair Corralation between Agree Realty and Public Storage
Assuming the 90 days trading horizon Agree Realty is expected to under-perform the Public Storage. But the preferred stock apears to be less risky and, when comparing its historical volatility, Agree Realty is 1.15 times less risky than Public Storage. The preferred stock trades about -0.32 of its potential returns per unit of risk. The Public Storage is currently generating about -0.25 of returns per unit of risk over similar time horizon. If you would invest 1,880 in Public Storage on August 27, 2024 and sell it today you would lose (111.00) from holding Public Storage or give up 5.9% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Agree Realty vs. Public Storage
Performance |
| Timeline |
| Agree Realty |
| Public Storage |
Agree Realty and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Agree Realty and Public Storage
The main advantage of trading using opposite Agree Realty and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Agree Realty 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.| Agree Realty vs. Vornado Realty Trust | Agree Realty vs. Rexford Industrial Realty | Agree Realty vs. Global Medical REIT | Agree Realty vs. Aquagold International |
| Public Storage vs. Public Storage | Public Storage vs. Public Storage | Public Storage vs. Public Storage | Public Storage 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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