Correlation Between Public Storage and Secure Property

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

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

Diversification Opportunities for Public Storage and Secure Property

-0.1

Correlation Coefficient

Public Storage  Secure Property

Good diversification

The 3 months correlation between Public and Secure is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and Secure Property Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Secure Property Deve 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 Secure Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Secure Property Deve has no effect on the direction of Public Storage i.e., Public Storage and Secure Property go up and down completely randomly.

Pair Corralation between Public Storage and Secure Property

Assuming the 90 days trading horizon Public Storage is expected to generate 0.28 times more return on investment than Secure Property. However, Public Storage is 3.62 times less risky than Secure Property. It trades about 0.01 of its potential returns per unit of risk. Secure Property Development is currently generating about -0.02 per unit of risk. If you would invest  29,137  in Public Storage on December 30, 2024 and sell it today you would earn a total of  59.00  from holding Public Storage or generate 0.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Public Storage  vs.  Secure Property Development

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 comparatively stable basic indicators, Public Storage is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Secure Property Deve

Risk-Adjusted Performance

Very Weak

Over the last 90 days Secure Property Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain 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.

Pair Trading with Public Storage and Secure Property

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

The idea behind Public Storage and Secure Property Development 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.