Correlation Between Global Self and Public Storage
Can any of the company-specific risk be diversified away by investing in both Global Self and Public Storage 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 Global Self and Public Storage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Self Storage and Public Storage, you can compare the effects of market volatilities on Global Self and Public Storage 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 Global Self with a short position of Public Storage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Self and Public Storage.
Diversification Opportunities for Global Self and Public Storage
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and Public is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Global Self Storage and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage and Global Self 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 Global Self Storage are associated (or correlated) with Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of Global Self i.e., Global Self and Public Storage go up and down completely randomly.
Pair Corralation between Global Self and Public Storage
Given the investment horizon of 90 days Global Self Storage is expected to under-perform the Public Storage. But the stock apears to be less risky and, when comparing its historical volatility, Global Self Storage is 1.42 times less risky than Public Storage. The stock trades about -0.03 of its potential returns per unit of risk. The Public Storage is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 32,366 in Public Storage on September 2, 2024 and sell it today you would earn a total of 2,439 from holding Public Storage or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Self Storage vs. Public Storage
Performance |
| Timeline |
| Global Self Storage |
| Public Storage |
Global Self and Public Storage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Self and Public Storage
The main advantage of trading using opposite Global Self and Public Storage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Self position performs unexpectedly, Public Storage 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 Public Storage will offset losses from the drop in Public Storage's long position.| Global Self vs. LXP Industrial Trust | Global Self vs. First Industrial Realty | Global Self vs. Plymouth Industrial REIT | Global Self vs. Terreno Realty |
| Public Storage vs. CubeSmart | Public Storage vs. National Storage Affiliates | Public Storage vs. Prologis | Public Storage vs. STAG Industrial |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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