Correlation Between BP Plc and Public Storage
Can any of the company-specific risk be diversified away by investing in both BP Plc 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 BP Plc and Public Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BP plc and Public Storage, you can compare the effects of market volatilities on BP Plc 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 BP Plc with a short position of Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of BP Plc and Public Storage.
Diversification Opportunities for BP Plc and Public Storage
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between BPE5 and Public is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding BP plc and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage and BP Plc 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 BP plc 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 BP Plc i.e., BP Plc and Public Storage go up and down completely randomly.
Pair Corralation between BP Plc and Public Storage
Assuming the 90 days trading horizon BP plc is expected to generate 1.31 times more return on investment than Public Storage. However, BP Plc is 1.31 times more volatile than Public Storage. It trades about 0.27 of its potential returns per unit of risk. Public Storage is currently generating about 0.04 per unit of risk. If you would invest 442.00 in BP plc on September 13, 2024 and sell it today you would earn a total of 38.00 from holding BP plc or generate 8.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BP plc vs. Public Storage
Performance |
| Timeline |
| BP plc |
| Public Storage |
BP Plc and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BP Plc and Public Storage
The main advantage of trading using opposite BP Plc and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BP Plc 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.| BP Plc vs. Tower Semiconductor | BP Plc vs. MagnaChip Semiconductor Corp | BP Plc vs. ELMOS SEMICONDUCTOR | BP Plc vs. BE Semiconductor Industries |
| Public Storage vs. Prologis | Public Storage vs. SEGRO Plc | Public Storage vs. Yara International ASA | Public Storage vs. Ascendas Real Estate |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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