Correlation Between Public Storage and YDUQ3F

Can any of the company-specific risk be diversified away by investing in both Public Storage and YDUQ3F 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 YDUQ3F into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Public Storage and YDUQ3F, you can compare the effects of market volatilities on Public Storage and YDUQ3F 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 YDUQ3F. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and YDUQ3F.

Diversification Opportunities for Public Storage and YDUQ3F

0.2

Correlation Coefficient

Public Storage  YDUQ3F

Modest diversification

The 3 months correlation between Public and YDUQ3F is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and YDUQ3F in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YDUQ3F 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 YDUQ3F. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YDUQ3F has no effect on the direction of Public Storage i.e., Public Storage and YDUQ3F go up and down completely randomly.

Pair Corralation between Public Storage and YDUQ3F

Assuming the 90 days trading horizon Public Storage is expected to under-perform the YDUQ3F. But the stock apears to be less risky and, when comparing its historical volatility, Public Storage is 4.46 times less risky than YDUQ3F. The stock trades about -0.21 of its potential returns per unit of risk. The YDUQ3F is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  833.00  in YDUQ3F on October 25, 2024 and sell it today you would earn a total of  64.00  from holding YDUQ3F or generate 7.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

Public Storage  vs.  YDUQ3F

Public Storage

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Public Storage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Public Storage is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

YDUQ3F

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in YDUQ3F are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, YDUQ3F may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Public Storage and YDUQ3F

The main advantage of trading using opposite Public Storage and YDUQ3F positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, YDUQ3F 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 YDUQ3F will offset losses from the drop in YDUQ3F's long position.

The idea behind Public Storage and YDUQ3F 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.