Correlation Between Public Storage and AGCO
Can any of the company-specific risk be diversified away by investing in both Public Storage and AGCO 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 AGCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and AGCO Corporation, you can compare the effects of market volatilities on Public Storage and AGCO 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 AGCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and AGCO.
Diversification Opportunities for Public Storage and AGCO
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Public and AGCO is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and AGCO Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AGCO 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 AGCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AGCO has no effect on the direction of Public Storage i.e., Public Storage and AGCO go up and down completely randomly.
Pair Corralation between Public Storage and AGCO
Assuming the 90 days horizon Public Storage is expected to generate 0.75 times more return on investment than AGCO. However, Public Storage is 1.33 times less risky than AGCO. It trades about 0.04 of its potential returns per unit of risk. AGCO Corporation is currently generating about -0.01 per unit of risk. If you would invest 26,512 in Public Storage on September 3, 2024 and sell it today you would earn a total of 6,808 from holding Public Storage or generate 25.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Storage vs. AGCO Corp.
Performance |
| Timeline |
| Public Storage |
| AGCO |
Public Storage and AGCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and AGCO
The main advantage of trading using opposite Public Storage and AGCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, AGCO 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 AGCO will offset losses from the drop in AGCO'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 |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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