Correlation Between Premier Foods and Public Storage
Can any of the company-specific risk be diversified away by investing in both Premier Foods 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 Premier Foods and Public Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Foods PLC and Public Storage, you can compare the effects of market volatilities on Premier Foods 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 Premier Foods with a short position of Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Foods and Public Storage.
Diversification Opportunities for Premier Foods and Public Storage
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Premier and Public is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Premier Foods PLC and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage and Premier Foods 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 Premier Foods 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 Premier Foods i.e., Premier Foods and Public Storage go up and down completely randomly.
Pair Corralation between Premier Foods and Public Storage
Assuming the 90 days trading horizon Premier Foods PLC is expected to generate 0.67 times more return on investment than Public Storage. However, Premier Foods PLC is 1.5 times less risky than Public Storage. It trades about 0.06 of its potential returns per unit of risk. Public Storage is currently generating about -0.41 per unit of risk. If you would invest 18,840 in Premier Foods PLC on September 24, 2024 and sell it today you would earn a total of 200.00 from holding Premier Foods PLC or generate 1.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premier Foods PLC vs. Public Storage
Performance |
| Timeline |
| Premier Foods PLC |
| Public Storage |
Premier Foods and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Foods and Public Storage
The main advantage of trading using opposite Premier Foods and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Foods 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.| Premier Foods vs. Coeur Mining | Premier Foods vs. Eastinco Mining Exploration | Premier Foods vs. European Metals Holdings | Premier Foods vs. Wheaton Precious Metals |
| Public Storage vs. Premier Foods PLC | Public Storage vs. Eco Animal Health | Public Storage vs. Grieg Seafood | Public Storage vs. Naturhouse Health SA |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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