Correlation Between Public Storage and SMA Solar
Can any of the company-specific risk be diversified away by investing in both Public Storage and SMA Solar 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 SMA Solar into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and SMA Solar Technology, you can compare the effects of market volatilities on Public Storage and SMA Solar 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 SMA Solar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and SMA Solar.
Diversification Opportunities for Public Storage and SMA Solar
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Public and SMA is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and SMA Solar Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMA Solar Technology 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 SMA Solar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMA Solar Technology has no effect on the direction of Public Storage i.e., Public Storage and SMA Solar go up and down completely randomly.
Pair Corralation between Public Storage and SMA Solar
Assuming the 90 days horizon Public Storage is expected to under-perform the SMA Solar. But the stock apears to be less risky and, when comparing its historical volatility, Public Storage is 4.25 times less risky than SMA Solar. The stock trades about -0.05 of its potential returns per unit of risk. The SMA Solar Technology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 1,382 in SMA Solar Technology on September 14, 2024 and sell it today you would earn a total of 69.00 from holding SMA Solar Technology or generate 4.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Storage vs. SMA Solar Technology
Performance |
| Timeline |
| Public Storage |
| SMA Solar Technology |
Public Storage and SMA Solar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and SMA Solar
The main advantage of trading using opposite Public Storage and SMA Solar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, SMA Solar 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 SMA Solar will offset losses from the drop in SMA Solar's long position.| Public Storage vs. Prologis | Public Storage vs. Yara International ASA | Public Storage vs. Ascendas Real Estate | Public Storage vs. STAG Industrial |
| SMA Solar vs. VIVA WINE GROUP | SMA Solar vs. Data3 Limited | SMA Solar vs. National Storage Affiliates | SMA Solar vs. Public Storage |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |