Correlation Between Public Storage and Sumitomo Mitsui
Can any of the company-specific risk be diversified away by investing in both Public Storage and Sumitomo Mitsui 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 Sumitomo Mitsui into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and Sumitomo Mitsui Construction, you can compare the effects of market volatilities on Public Storage and Sumitomo Mitsui 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 Sumitomo Mitsui. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and Sumitomo Mitsui.
Diversification Opportunities for Public Storage and Sumitomo Mitsui
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Public and Sumitomo is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and Sumitomo Mitsui Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sumitomo Mitsui Cons 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 Sumitomo Mitsui. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sumitomo Mitsui Cons has no effect on the direction of Public Storage i.e., Public Storage and Sumitomo Mitsui go up and down completely randomly.
Pair Corralation between Public Storage and Sumitomo Mitsui
Assuming the 90 days horizon Public Storage is expected to generate 0.91 times more return on investment than Sumitomo Mitsui. However, Public Storage is 1.1 times less risky than Sumitomo Mitsui. It trades about 0.08 of its potential returns per unit of risk. Sumitomo Mitsui Construction is currently generating about -0.08 per unit of risk. If you would invest 31,930 in Public Storage on September 3, 2024 and sell it today you would earn a total of 1,390 from holding Public Storage or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Storage vs. Sumitomo Mitsui Construction
Performance |
| Timeline |
| Public Storage |
| Sumitomo Mitsui Cons |
Public Storage and Sumitomo Mitsui Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and Sumitomo Mitsui
The main advantage of trading using opposite Public Storage and Sumitomo Mitsui positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, Sumitomo Mitsui 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 Sumitomo Mitsui will offset losses from the drop in Sumitomo Mitsui's long position.| Public Storage vs. SBA Communications Corp | Public Storage vs. INTERSHOP Communications Aktiengesellschaft | Public Storage vs. Cass Information Systems | Public Storage vs. Citic Telecom International |
| Sumitomo Mitsui vs. Public Storage | Sumitomo Mitsui vs. TERADATA | Sumitomo Mitsui vs. Fidelity National Information | Sumitomo Mitsui vs. Darden Restaurants |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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