Correlation Between Industrial Logistics and Public Storage
Can any of the company-specific risk be diversified away by investing in both Industrial Logistics 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 Industrial Logistics and Public Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Industrial Logistics Properties and Public Storage, you can compare the effects of market volatilities on Industrial Logistics 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 Industrial Logistics with a short position of Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Industrial Logistics and Public Storage.
Diversification Opportunities for Industrial Logistics and Public Storage
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Industrial and Public is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Industrial Logistics Propertie and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage and Industrial Logistics 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 Industrial Logistics Properties 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 Industrial Logistics i.e., Industrial Logistics and Public Storage go up and down completely randomly.
Pair Corralation between Industrial Logistics and Public Storage
Given the investment horizon of 90 days Industrial Logistics Properties is expected to generate 4.68 times more return on investment than Public Storage. However, Industrial Logistics is 4.68 times more volatile than Public Storage. It trades about 0.02 of its potential returns per unit of risk. Public Storage is currently generating about 0.04 per unit of risk. If you would invest 368.00 in Industrial Logistics Properties on August 24, 2024 and sell it today you would earn a total of 2.00 from holding Industrial Logistics Properties or generate 0.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Industrial Logistics Propertie vs. Public Storage
Performance |
| Timeline |
| Industrial Logistics |
| Public Storage |
Industrial Logistics and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Industrial Logistics and Public Storage
The main advantage of trading using opposite Industrial Logistics and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Industrial Logistics 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.| Industrial Logistics vs. Terreno Realty | Industrial Logistics vs. LXP Industrial Trust | Industrial Logistics vs. Rexford Industrial Realty | Industrial Logistics vs. First Industrial Realty |
| 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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