Correlation Between Lenovo Group and PUBLIC STORAGE
Can any of the company-specific risk be diversified away by investing in both Lenovo Group 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 Lenovo Group and PUBLIC STORAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lenovo Group Limited and PUBLIC STORAGE PRFO, you can compare the effects of market volatilities on Lenovo Group 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 Lenovo Group with a short position of PUBLIC STORAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lenovo Group and PUBLIC STORAGE.
Diversification Opportunities for Lenovo Group and PUBLIC STORAGE
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Lenovo and PUBLIC is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Lenovo Group Limited and PUBLIC STORAGE PRFO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUBLIC STORAGE PRFO and Lenovo Group 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 Lenovo Group Limited 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 PRFO has no effect on the direction of Lenovo Group i.e., Lenovo Group and PUBLIC STORAGE go up and down completely randomly.
Pair Corralation between Lenovo Group and PUBLIC STORAGE
Assuming the 90 days trading horizon Lenovo Group Limited is expected to generate 2.96 times more return on investment than PUBLIC STORAGE. However, Lenovo Group is 2.96 times more volatile than PUBLIC STORAGE PRFO. It trades about 0.03 of its potential returns per unit of risk. PUBLIC STORAGE PRFO is currently generating about 0.01 per unit of risk. If you would invest 1,815 in Lenovo Group Limited on August 28, 2024 and sell it today you would earn a total of 405.00 from holding Lenovo Group Limited or generate 22.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lenovo Group Limited vs. PUBLIC STORAGE PRFO
Performance |
| Timeline |
| Lenovo Group Limited |
| PUBLIC STORAGE PRFO |
Lenovo Group and PUBLIC STORAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lenovo Group and PUBLIC STORAGE
The main advantage of trading using opposite Lenovo Group and PUBLIC STORAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lenovo Group 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.| Lenovo Group vs. QBE Insurance Group | Lenovo Group vs. SALESFORCE INC CDR | Lenovo Group vs. TFS FINANCIAL | Lenovo Group vs. YATRA ONLINE DL 0001 |
| PUBLIC STORAGE vs. Xtrackers ShortDAX | PUBLIC STORAGE vs. Lyxor 1 | PUBLIC STORAGE vs. Xtrackers LevDAX | PUBLIC STORAGE vs. Superior Plus Corp |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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