Correlation Between MAHLE Metal and Public Storage
Can any of the company-specific risk be diversified away by investing in both MAHLE Metal 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 MAHLE Metal and Public Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAHLE Metal Leve and Public Storage, you can compare the effects of market volatilities on MAHLE Metal 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 MAHLE Metal with a short position of Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAHLE Metal and Public Storage.
Diversification Opportunities for MAHLE Metal and Public Storage
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between MAHLE and Public is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding MAHLE Metal Leve and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage and MAHLE Metal 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 MAHLE Metal Leve 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 MAHLE Metal i.e., MAHLE Metal and Public Storage go up and down completely randomly.
Pair Corralation between MAHLE Metal and Public Storage
Assuming the 90 days trading horizon MAHLE Metal Leve is expected to generate 1.16 times more return on investment than Public Storage. However, MAHLE Metal is 1.16 times more volatile than Public Storage. It trades about 0.01 of its potential returns per unit of risk. Public Storage is currently generating about -0.3 per unit of risk. If you would invest 2,758 in MAHLE Metal Leve on October 28, 2024 and sell it today you would lose (1.00) from holding MAHLE Metal Leve or give up 0.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAHLE Metal Leve vs. Public Storage
Performance |
| Timeline |
| MAHLE Metal Leve |
| Public Storage |
MAHLE Metal and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAHLE Metal and Public Storage
The main advantage of trading using opposite MAHLE Metal and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAHLE Metal 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.| MAHLE Metal vs. Ser Educacional Sa | MAHLE Metal vs. Yduqs Participaes SA | MAHLE Metal vs. PBG SA | MAHLE Metal vs. Movida Participaes SA |
| Public Storage vs. Liberty Broadband | Public Storage vs. Metalurgica Gerdau SA | Public Storage vs. United States Steel | Public Storage vs. MAHLE Metal Leve |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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