Correlation Between Public Storage and Zoom Video

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

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

Diversification Opportunities for Public Storage and Zoom Video

0.39

Correlation Coefficient

Public Storage  Zoom Video

Weak diversification

The 3 months correlation between Public and Zoom is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications 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 Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of Public Storage i.e., Public Storage and Zoom Video go up and down completely randomly.

Pair Corralation between Public Storage and Zoom Video

Assuming the 90 days trading horizon Public Storage is expected to generate 0.4 times more return on investment than Zoom Video. However, Public Storage is 2.51 times less risky than Zoom Video. It trades about -0.17 of its potential returns per unit of risk. Zoom Video Communications is currently generating about -0.13 per unit of risk. If you would invest  37,246  in Public Storage on December 24, 2024 and sell it today you would lose (3,491) from holding Public Storage or give up 9.37% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Public Storage  vs.  Zoom Video Communications

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. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Zoom Video Communications

Risk-Adjusted Performance

Very Weak

Over the last 90 days Zoom Video Communications has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Public Storage and Zoom Video

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

The idea behind Public Storage and Zoom Video Communications 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.