Correlation Between Public Storage and SCI AG
Can any of the company-specific risk be diversified away by investing in both Public Storage and SCI AG 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 SCI AG into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and SCI AG, you can compare the effects of market volatilities on Public Storage and SCI AG 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 SCI AG. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and SCI AG.
Diversification Opportunities for Public Storage and SCI AG
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Public and SCI is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and SCI AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCI AG 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 SCI AG. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCI AG has no effect on the direction of Public Storage i.e., Public Storage and SCI AG go up and down completely randomly.
Pair Corralation between Public Storage and SCI AG
Assuming the 90 days horizon Public Storage is expected to under-perform the SCI AG. But the stock apears to be less risky and, when comparing its historical volatility, Public Storage is 2.82 times less risky than SCI AG. The stock trades about -0.05 of its potential returns per unit of risk. The SCI AG is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,780 in SCI AG on September 14, 2024 and sell it today you would earn a total of 60.00 from holding SCI AG or generate 3.37% 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. SCI AG
Performance |
| Timeline |
| Public Storage |
| SCI AG |
Public Storage and SCI AG Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and SCI AG
The main advantage of trading using opposite Public Storage and SCI AG positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, SCI AG 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 SCI AG will offset losses from the drop in SCI AG's long position.| Public Storage vs. Prologis | Public Storage vs. Yara International ASA | Public Storage vs. Ascendas Real Estate | Public Storage vs. STAG Industrial |
| SCI AG vs. Automatic Data Processing | SCI AG vs. COMMERCIAL VEHICLE | SCI AG vs. Public Storage | SCI AG vs. INTER CARS SA |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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