Correlation Between Public Storage and Global Self

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

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

Diversification Opportunities for Public Storage and Global Self

-0.19

Correlation Coefficient

Public Storage  Global Self

Good diversification

The 3 months correlation between Public and Global is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage 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 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 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 Public Storage i.e., Public Storage and Global Self go up and down completely randomly.

Pair Corralation between Public Storage and Global Self

Considering the 90-day investment horizon Public Storage is expected to generate 1.32 times more return on investment than Global Self. However, Public Storage is 1.32 times more volatile than Global Self Storage. It trades about 0.12 of its potential returns per unit of risk. Global Self Storage is currently generating about 0.08 per unit of risk. If you would invest  29,748  in Public Storage on November 29, 2024 and sell it today you would earn a total of  813.00  from holding Public Storage or generate 2.73% 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.  Global Self Storage

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 inconsistent 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.

Global Self Storage

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Global Self Storage are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. 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 Public Storage and Global Self

The main advantage of trading using opposite Public Storage and Global Self positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage 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 Public Storage 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.

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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.