Correlation Between Penn National and Public Storage
Can any of the company-specific risk be diversified away by investing in both Penn National 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 Penn National and Public Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Penn National Gaming and Public Storage, you can compare the effects of market volatilities on Penn National 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 Penn National with a short position of Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Penn National and Public Storage.
Diversification Opportunities for Penn National and Public Storage
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Penn and Public is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Penn National Gaming and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage and Penn National 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 Penn National Gaming 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 Penn National i.e., Penn National and Public Storage go up and down completely randomly.
Pair Corralation between Penn National and Public Storage
Assuming the 90 days horizon Penn National is expected to generate 1.46 times less return on investment than Public Storage. In addition to that, Penn National is 1.32 times more volatile than Public Storage. It trades about 0.06 of its total potential returns per unit of risk. Public Storage is currently generating about 0.12 per unit of volatility. If you would invest 28,350 in Public Storage on November 29, 2024 and sell it today you would earn a total of 970.00 from holding Public Storage or generate 3.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Penn National Gaming vs. Public Storage
Performance |
| Timeline |
| Penn National Gaming |
| Public Storage |
Penn National and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Penn National and Public Storage
The main advantage of trading using opposite Penn National and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penn National 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.| Penn National vs. PARKEN SPORT ENT | Penn National vs. PICKN PAY STORES | Penn National vs. COLUMBIA SPORTSWEAR | Penn National vs. Transport International Holdings |
| Public Storage vs. SLR Investment Corp | Public Storage vs. CHRYSALIS INVESTMENTS LTD | Public Storage vs. New Residential Investment | Public Storage vs. Cars Inc |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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