Correlation Between Plymouth Industrial and Global Self

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

By analyzing existing cross correlation between Plymouth Industrial REIT and Global Self Storage, you can compare the effects of market volatilities on Plymouth Industrial and Global Self 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 Plymouth Industrial with a short position of Global Self. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plymouth Industrial and Global Self.

Diversification Opportunities for Plymouth Industrial and Global Self

0.4

Correlation Coefficient

Plymouth Industrial  Global Self

Very weak diversification

The 3 months correlation between Plymouth and Global is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Plymouth Industrial REIT and Global Self Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Self Storage and Plymouth Industrial 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 Plymouth Industrial REIT are associated (or correlated) with Global Self. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Self Storage has no effect on the direction of Plymouth Industrial i.e., Plymouth Industrial and Global Self go up and down completely randomly.

Pair Corralation between Plymouth Industrial and Global Self

Given the investment horizon of 90 days Plymouth Industrial REIT is expected to under-perform the Global Self. In addition to that, Plymouth Industrial is 1.53 times more volatile than Global Self Storage. It trades about -0.04 of its total potential returns per unit of risk. Global Self Storage is currently generating about -0.05 per unit of volatility. If you would invest  521.00  in Global Self Storage on December 29, 2024 and sell it today you would lose (16.00) from holding Global Self Storage or give up 3.07% of portfolio value over 90 days.

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

Plymouth Industrial REIT  vs.  Global Self Storage

Plymouth Industrial REIT

Risk-Adjusted Performance

Very Weak

Over the last 90 days Plymouth Industrial REIT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Plymouth Industrial is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Global Self Storage

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global Self Storage has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, Global Self is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Plymouth Industrial and Global Self

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

The idea behind Plymouth Industrial REIT and Global Self Storage 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.