Correlation Between Beijing Media and PUBLIC STORAGE
Can any of the company-specific risk be diversified away by investing in both Beijing Media 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 Beijing Media and PUBLIC STORAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beijing Media and PUBLIC STORAGE PRFO, you can compare the effects of market volatilities on Beijing Media 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 Beijing Media with a short position of PUBLIC STORAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beijing Media and PUBLIC STORAGE.
Diversification Opportunities for Beijing Media and PUBLIC STORAGE
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Beijing and PUBLIC is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Beijing Media and PUBLIC STORAGE PRFO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUBLIC STORAGE PRFO and Beijing Media 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 Beijing Media 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 PRFO has no effect on the direction of Beijing Media i.e., Beijing Media and PUBLIC STORAGE go up and down completely randomly.
Pair Corralation between Beijing Media and PUBLIC STORAGE
Assuming the 90 days horizon Beijing Media is expected to generate 3.34 times more return on investment than PUBLIC STORAGE. However, Beijing Media is 3.34 times more volatile than PUBLIC STORAGE PRFO. It trades about 0.04 of its potential returns per unit of risk. PUBLIC STORAGE PRFO is currently generating about -0.01 per unit of risk. If you would invest 3.45 in Beijing Media on August 29, 2024 and sell it today you would earn a total of 0.10 from holding Beijing Media or generate 2.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beijing Media vs. PUBLIC STORAGE PRFO
Performance |
| Timeline |
| Beijing Media |
| PUBLIC STORAGE PRFO |
Beijing Media and PUBLIC STORAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beijing Media and PUBLIC STORAGE
The main advantage of trading using opposite Beijing Media and PUBLIC STORAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beijing Media 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.| Beijing Media vs. Superior Plus Corp | Beijing Media vs. SIVERS SEMICONDUCTORS AB | Beijing Media vs. Talanx AG | Beijing Media vs. 2G ENERGY |
| PUBLIC STORAGE vs. Lyxor 1 | PUBLIC STORAGE vs. Xtrackers LevDAX | PUBLIC STORAGE vs. Xtrackers ShortDAX | PUBLIC STORAGE vs. Superior Plus Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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