Correlation Between Public Storage and Big Yellow
Can any of the company-specific risk be diversified away by investing in both Public Storage and Big Yellow 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 Public Storage and Big Yellow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and Big Yellow Group, you can compare the effects of market volatilities on Public Storage and Big Yellow 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 Public Storage with a short position of Big Yellow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and Big Yellow.
Diversification Opportunities for Public Storage and Big Yellow
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Public and Big is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and Big Yellow Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Big Yellow Group and Public Storage 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 Public Storage are associated (or correlated) with Big Yellow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Big Yellow Group has no effect on the direction of Public Storage i.e., Public Storage and Big Yellow go up and down completely randomly.
Pair Corralation between Public Storage and Big Yellow
Considering the 90-day investment horizon Public Storage is expected to generate 1.14 times less return on investment than Big Yellow. But when comparing it to its historical volatility, Public Storage is 2.12 times less risky than Big Yellow. It trades about 0.04 of its potential returns per unit of risk. Big Yellow Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,302 in Big Yellow Group on September 4, 2024 and sell it today you would earn a total of 73.00 from holding Big Yellow Group or generate 5.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 87.47% |
| Values | Daily Returns |
Public Storage vs. Big Yellow Group
Performance |
| Timeline |
| Public Storage |
| Big Yellow Group |
Public Storage and Big Yellow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and Big Yellow
The main advantage of trading using opposite Public Storage and Big Yellow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, Big Yellow 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 Big Yellow will offset losses from the drop in Big Yellow's long position.| Public Storage vs. Prologis | Public Storage vs. EastGroup Properties | Public Storage vs. Rexford Industrial Realty | Public Storage vs. Plymouth Industrial REIT |
| Big Yellow vs. Palo Alto Networks | Big Yellow vs. Singular Genomics Systems | Big Yellow vs. BlackRock | Big Yellow vs. Deckers Outdoor |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
Other Complementary Tools
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |