Correlation Between Public Storage and Hollywood Bowl

Can any of the company-specific risk be diversified away by investing in both Public Storage and Hollywood Bowl 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 Hollywood Bowl into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Public Storage and Hollywood Bowl Group, you can compare the effects of market volatilities on Public Storage and Hollywood Bowl 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 Hollywood Bowl. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and Hollywood Bowl.

Diversification Opportunities for Public Storage and Hollywood Bowl

0.8

Correlation Coefficient

Public Storage  Hollywood Bowl

Very poor diversification

The 3 months correlation between Public and Hollywood is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and Hollywood Bowl Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hollywood Bowl Group 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 Hollywood Bowl. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hollywood Bowl Group has no effect on the direction of Public Storage i.e., Public Storage and Hollywood Bowl go up and down completely randomly.

Pair Corralation between Public Storage and Hollywood Bowl

Assuming the 90 days trading horizon Public Storage is expected to generate 0.62 times more return on investment than Hollywood Bowl. However, Public Storage is 1.6 times less risky than Hollywood Bowl. It trades about -0.16 of its potential returns per unit of risk. Hollywood Bowl Group is currently generating about -0.11 per unit of risk. If you would invest  34,480  in Public Storage on November 29, 2024 and sell it today you would lose (4,099) from holding Public Storage or give up 11.89% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Public Storage  vs.  Hollywood Bowl Group

Public Storage

Risk-Adjusted Performance

Very Weak

Over the last 90 days Public Storage has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Hollywood Bowl Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hollywood Bowl Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Public Storage and Hollywood Bowl

The main advantage of trading using opposite Public Storage and Hollywood Bowl positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, Hollywood Bowl 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 Hollywood Bowl will offset losses from the drop in Hollywood Bowl's long position.

The idea behind Public Storage and Hollywood Bowl Group pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.