Correlation Between Public Storage and COFCO Joycome

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

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

Diversification Opportunities for Public Storage and COFCO Joycome

-0.4

Correlation Coefficient

Public Storage  COFCO Joycome

Very good diversification

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

Pair Corralation between Public Storage and COFCO Joycome

Assuming the 90 days horizon Public Storage is expected to under-perform the COFCO Joycome. But the stock apears to be less risky and, when comparing its historical volatility, Public Storage is 2.71 times less risky than COFCO Joycome. The stock trades about -0.04 of its potential returns per unit of risk. The COFCO Joycome Foods is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  14.00  in COFCO Joycome Foods on September 14, 2024 and sell it today you would earn a total of  4.00  from holding COFCO Joycome Foods or generate 28.57% return on investment over 90 days.

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

Public Storage  vs.  COFCO Joycome Foods

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 nearly stable basic indicators, Public Storage is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

COFCO Joycome Foods

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in COFCO Joycome Foods are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, COFCO Joycome reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Public Storage and COFCO Joycome

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

The idea behind Public Storage and COFCO Joycome Foods 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.