Correlation Between PUBLIC STORAGE and LPKF Laser
Can any of the company-specific risk be diversified away by investing in both PUBLIC STORAGE and LPKF Laser 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 LPKF Laser 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 LPKF Laser Electronics, you can compare the effects of market volatilities on PUBLIC STORAGE and LPKF Laser 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 LPKF Laser. Check out your portfolio center. Please also check ongoing floating volatility patterns of PUBLIC STORAGE and LPKF Laser.
Diversification Opportunities for PUBLIC STORAGE and LPKF Laser
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PUBLIC and LPKF is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding PUBLIC STORAGE PRFO and LPKF Laser Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LPKF Laser Electronics 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 LPKF Laser. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LPKF Laser Electronics has no effect on the direction of PUBLIC STORAGE i.e., PUBLIC STORAGE and LPKF Laser go up and down completely randomly.
Pair Corralation between PUBLIC STORAGE and LPKF Laser
Assuming the 90 days trading horizon PUBLIC STORAGE PRFO is expected to generate 0.17 times more return on investment than LPKF Laser. However, PUBLIC STORAGE PRFO is 5.88 times less risky than LPKF Laser. It trades about -0.06 of its potential returns per unit of risk. LPKF Laser Electronics is currently generating about -0.03 per unit of risk. If you would invest 1,650 in PUBLIC STORAGE PRFO on September 14, 2024 and sell it today you would lose (20.00) from holding PUBLIC STORAGE PRFO or give up 1.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PUBLIC STORAGE PRFO vs. LPKF Laser Electronics
Performance |
| Timeline |
| PUBLIC STORAGE PRFO |
| LPKF Laser Electronics |
PUBLIC STORAGE and LPKF Laser Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PUBLIC STORAGE and LPKF Laser
The main advantage of trading using opposite PUBLIC STORAGE and LPKF Laser positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PUBLIC STORAGE position performs unexpectedly, LPKF Laser 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 LPKF Laser will offset losses from the drop in LPKF Laser's long position.| PUBLIC STORAGE vs. Xtrackers LevDAX | PUBLIC STORAGE vs. Xtrackers ShortDAX | PUBLIC STORAGE vs. Lyxor 1 | PUBLIC STORAGE vs. SIVERS SEMICONDUCTORS AB |
| LPKF Laser vs. Schneider Electric SE | LPKF Laser vs. Superior Plus Corp | LPKF Laser vs. SIVERS SEMICONDUCTORS AB | LPKF Laser vs. Norsk Hydro ASA |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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