Correlation Between GM and Public Storage
Can any of the company-specific risk be diversified away by investing in both GM 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 GM and Public Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Public Storage, you can compare the effects of market volatilities on GM 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 GM with a short position of Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Public Storage.
Diversification Opportunities for GM and Public Storage
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between GM and Public is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage and GM 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 General Motors 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 GM i.e., GM and Public Storage go up and down completely randomly.
Pair Corralation between GM and Public Storage
Allowing for the 90-day total investment horizon General Motors is expected to generate 2.38 times more return on investment than Public Storage. However, GM is 2.38 times more volatile than Public Storage. It trades about 0.05 of its potential returns per unit of risk. Public Storage is currently generating about 0.04 per unit of risk. If you would invest 3,805 in General Motors on September 3, 2024 and sell it today you would earn a total of 1,754 from holding General Motors or generate 46.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Public Storage
Performance |
| Timeline |
| General Motors |
| Public Storage |
GM and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Public Storage
The main advantage of trading using opposite GM and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM 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.| GM vs. GreenPower Motor | GM vs. ZEEKR Intelligent Technology | GM vs. Volcon Inc | GM vs. ECD Automotive Design |
| 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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