Correlation Between OneSavings Bank and Public Storage
Can any of the company-specific risk be diversified away by investing in both OneSavings Bank 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 OneSavings Bank and Public Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between OneSavings Bank PLC and Public Storage, you can compare the effects of market volatilities on OneSavings Bank 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 OneSavings Bank with a short position of Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of OneSavings Bank and Public Storage.
Diversification Opportunities for OneSavings Bank and Public Storage
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between OneSavings and Public is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding OneSavings Bank PLC and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage and OneSavings Bank 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 OneSavings Bank 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 OneSavings Bank i.e., OneSavings Bank and Public Storage go up and down completely randomly.
Pair Corralation between OneSavings Bank and Public Storage
Assuming the 90 days trading horizon OneSavings Bank is expected to generate 1.12 times less return on investment than Public Storage. In addition to that, OneSavings Bank is 1.73 times more volatile than Public Storage. It trades about 0.02 of its total potential returns per unit of risk. Public Storage is currently generating about 0.03 per unit of volatility. If you would invest 27,886 in Public Storage on December 11, 2024 and sell it today you would earn a total of 3,043 from holding Public Storage or generate 10.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.39% |
| Values | Daily Returns |
OneSavings Bank PLC vs. Public Storage
Performance |
| Timeline |
| OneSavings Bank PLC |
| Public Storage |
OneSavings Bank and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with OneSavings Bank and Public Storage
The main advantage of trading using opposite OneSavings Bank and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if OneSavings Bank 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.| OneSavings Bank vs. Eastman Chemical Co | ||
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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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