Correlation Between Gamma Communications and Public Storage
Can any of the company-specific risk be diversified away by investing in both Gamma Communications 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 Gamma Communications and Public Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gamma Communications PLC and Public Storage, you can compare the effects of market volatilities on Gamma Communications 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 Gamma Communications with a short position of Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gamma Communications and Public Storage.
Diversification Opportunities for Gamma Communications and Public Storage
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Gamma and Public is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Gamma Communications PLC and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage and Gamma Communications 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 Gamma Communications 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 Gamma Communications i.e., Gamma Communications and Public Storage go up and down completely randomly.
Pair Corralation between Gamma Communications and Public Storage
Assuming the 90 days trading horizon Gamma Communications PLC is expected to generate 0.9 times more return on investment than Public Storage. However, Gamma Communications PLC is 1.12 times less risky than Public Storage. It trades about 0.01 of its potential returns per unit of risk. Public Storage is currently generating about -0.14 per unit of risk. If you would invest 162,000 in Gamma Communications PLC on September 12, 2024 and sell it today you would earn a total of 0.00 from holding Gamma Communications PLC or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Gamma Communications PLC vs. Public Storage
Performance |
| Timeline |
| Gamma Communications PLC |
| Public Storage |
Gamma Communications and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gamma Communications and Public Storage
The main advantage of trading using opposite Gamma Communications and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gamma Communications 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.| Gamma Communications vs. Catalyst Media Group | Gamma Communications vs. CATLIN GROUP | Gamma Communications vs. Tamburi Investment Partners | Gamma Communications vs. Magnora ASA |
| Public Storage vs. Hong Kong Land | Public Storage vs. Neometals | Public Storage vs. Coor Service Management | Public Storage vs. Fidelity Sustainable USD |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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