Correlation Between PUBLIC STORAGE and GigaMedia
Can any of the company-specific risk be diversified away by investing in both PUBLIC STORAGE and GigaMedia 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 GigaMedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PUBLIC STORAGE PRFO and GigaMedia, you can compare the effects of market volatilities on PUBLIC STORAGE and GigaMedia 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 GigaMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of PUBLIC STORAGE and GigaMedia.
Diversification Opportunities for PUBLIC STORAGE and GigaMedia
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between PUBLIC and GigaMedia is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding PUBLIC STORAGE PRFO and GigaMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GigaMedia 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 PRFO are associated (or correlated) with GigaMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GigaMedia has no effect on the direction of PUBLIC STORAGE i.e., PUBLIC STORAGE and GigaMedia go up and down completely randomly.
Pair Corralation between PUBLIC STORAGE and GigaMedia
Assuming the 90 days trading horizon PUBLIC STORAGE PRFO is expected to generate 0.7 times more return on investment than GigaMedia. However, PUBLIC STORAGE PRFO is 1.42 times less risky than GigaMedia. It trades about 0.03 of its potential returns per unit of risk. GigaMedia is currently generating about 0.0 per unit of risk. If you would invest 1,497 in PUBLIC STORAGE PRFO on September 1, 2024 and sell it today you would earn a total of 153.00 from holding PUBLIC STORAGE PRFO or generate 10.22% 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 PRFO vs. GigaMedia
Performance |
| Timeline |
| PUBLIC STORAGE PRFO |
| GigaMedia |
PUBLIC STORAGE and GigaMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PUBLIC STORAGE and GigaMedia
The main advantage of trading using opposite PUBLIC STORAGE and GigaMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PUBLIC STORAGE position performs unexpectedly, GigaMedia 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 GigaMedia will offset losses from the drop in GigaMedia's long position.| PUBLIC STORAGE vs. Lyxor 1 | PUBLIC STORAGE vs. Xtrackers ShortDAX | PUBLIC STORAGE vs. Xtrackers LevDAX | PUBLIC STORAGE vs. Superior Plus Corp |
| GigaMedia vs. Charter Communications | GigaMedia vs. COMBA TELECOM SYST | GigaMedia vs. Singapore Telecommunications Limited | GigaMedia vs. QUEEN S ROAD |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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