Correlation Between Public Storage and Ascendas Real

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

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

Diversification Opportunities for Public Storage and Ascendas Real

-0.32

Correlation Coefficient

Public Storage  Ascendas Real

Very good diversification

The 3 months correlation between Public and Ascendas is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and Ascendas Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascendas Real Estate 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 Ascendas Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascendas Real Estate has no effect on the direction of Public Storage i.e., Public Storage and Ascendas Real go up and down completely randomly.

Pair Corralation between Public Storage and Ascendas Real

Assuming the 90 days horizon Public Storage is expected to under-perform the Ascendas Real. In addition to that, Public Storage is 1.37 times more volatile than Ascendas Real Estate. It trades about -0.01 of its total potential returns per unit of risk. Ascendas Real Estate is currently generating about 0.1 per unit of volatility. If you would invest  170.00  in Ascendas Real Estate on December 29, 2024 and sell it today you would earn a total of  12.00  from holding Ascendas Real Estate or generate 7.06% 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.  Ascendas Real Estate

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

Ascendas Real Estate

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ascendas Real Estate are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Ascendas Real may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Public Storage and Ascendas Real

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

The idea behind Public Storage and Ascendas Real Estate 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.