Correlation Between Public Storage and AM EAGLE
Can any of the company-specific risk be diversified away by investing in both Public Storage and AM EAGLE 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 AM EAGLE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and AM EAGLE OUTFITTERS, you can compare the effects of market volatilities on Public Storage and AM EAGLE 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 AM EAGLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and AM EAGLE.
Diversification Opportunities for Public Storage and AM EAGLE
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Public and AFG is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and AM EAGLE OUTFITTERS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AM EAGLE OUTFITTERS 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 AM EAGLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AM EAGLE OUTFITTERS has no effect on the direction of Public Storage i.e., Public Storage and AM EAGLE go up and down completely randomly.
Pair Corralation between Public Storage and AM EAGLE
Assuming the 90 days horizon Public Storage is expected to generate 1.31 times less return on investment than AM EAGLE. But when comparing it to its historical volatility, Public Storage is 1.78 times less risky than AM EAGLE. It trades about 0.04 of its potential returns per unit of risk. AM EAGLE OUTFITTERS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,453 in AM EAGLE OUTFITTERS on August 30, 2024 and sell it today you would earn a total of 297.00 from holding AM EAGLE OUTFITTERS or generate 20.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Storage vs. AM EAGLE OUTFITTERS
Performance |
| Timeline |
| Public Storage |
| AM EAGLE OUTFITTERS |
Public Storage and AM EAGLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and AM EAGLE
The main advantage of trading using opposite Public Storage and AM EAGLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, AM EAGLE 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 AM EAGLE will offset losses from the drop in AM EAGLE's long position.| Public Storage vs. EastGroup Properties | Public Storage vs. Superior Plus Corp | Public Storage vs. SIVERS SEMICONDUCTORS AB | Public Storage vs. Talanx AG |
| AM EAGLE vs. Apple Inc | AM EAGLE vs. Apple Inc | AM EAGLE vs. Superior Plus Corp | AM EAGLE vs. SIVERS SEMICONDUCTORS AB |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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