Correlation Between Public Storage and Elmos Semiconductor

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

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

Diversification Opportunities for Public Storage and Elmos Semiconductor

0.24

Correlation Coefficient

Public Storage  Elmos Semiconductor

Modest diversification

The 3 months correlation between Public and Elmos is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and Elmos Semiconductor SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elmos Semiconductor 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 Elmos Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elmos Semiconductor has no effect on the direction of Public Storage i.e., Public Storage and Elmos Semiconductor go up and down completely randomly.

Pair Corralation between Public Storage and Elmos Semiconductor

Assuming the 90 days horizon Public Storage is expected to generate 0.57 times more return on investment than Elmos Semiconductor. However, Public Storage is 1.75 times less risky than Elmos Semiconductor. It trades about -0.03 of its potential returns per unit of risk. Elmos Semiconductor SE is currently generating about -0.05 per unit of risk. If you would invest  27,903  in Public Storage on December 30, 2024 and sell it today you would lose (1,063) from holding Public Storage or give up 3.81% 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.  Elmos Semiconductor SE

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

Elmos Semiconductor

Risk-Adjusted Performance

Very Weak

Over the last 90 days Elmos Semiconductor SE has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Public Storage and Elmos Semiconductor

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

The idea behind Public Storage and Elmos Semiconductor SE 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.