Correlation Between Public Storage and LBG Media
Can any of the company-specific risk be diversified away by investing in both Public Storage and LBG Media 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 LBG Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and LBG Media PLC, you can compare the effects of market volatilities on Public Storage and LBG Media 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 LBG Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and LBG Media.
Diversification Opportunities for Public Storage and LBG Media
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Public and LBG is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage and LBG Media PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LBG Media PLC 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 LBG Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LBG Media PLC has no effect on the direction of Public Storage i.e., Public Storage and LBG Media go up and down completely randomly.
Pair Corralation between Public Storage and LBG Media
Assuming the 90 days trading horizon Public Storage is expected to generate 4.1 times less return on investment than LBG Media. But when comparing it to its historical volatility, Public Storage is 2.94 times less risky than LBG Media. It trades about 0.03 of its potential returns per unit of risk. LBG Media PLC is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 8,970 in LBG Media PLC on April 25, 2025 and sell it today you would earn a total of 470.00 from holding LBG Media PLC or generate 5.24% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.41% |
Values | Daily Returns |
Public Storage vs. LBG Media PLC
Performance |
Timeline |
Public Storage |
LBG Media PLC |
Public Storage and LBG Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Public Storage and LBG Media
The main advantage of trading using opposite Public Storage and LBG Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage position performs unexpectedly, LBG Media 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 LBG Media will offset losses from the drop in LBG Media's long position.Public Storage vs. Teradata Corp | Public Storage vs. Games Workshop Group | Public Storage vs. Orient Telecoms | Public Storage vs. Aeorema Communications Plc |
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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 Global Correlations module to find global opportunities by holding instruments from different markets.
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