Correlation Between Americold Realty and Public Storage

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

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

Diversification Opportunities for Americold Realty and Public Storage

0.86

Correlation Coefficient

Americold Realty  Public Storage

Very poor diversification

The 3 months correlation between Americold and Public is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Americold Realty Trust and Public Storage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Storage and Americold Realty 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 Americold Realty Trust are associated (or correlated) with Public Storage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Storage has no effect on the direction of Americold Realty i.e., Americold Realty and Public Storage go up and down completely randomly.

Pair Corralation between Americold Realty and Public Storage

Given the investment horizon of 90 days Americold Realty Trust is expected to under-perform the Public Storage. In addition to that, Americold Realty is 2.1 times more volatile than Public Storage. It trades about -0.21 of its total potential returns per unit of risk. Public Storage is currently generating about -0.16 per unit of volatility. If you would invest  1,934  in Public Storage on September 12, 2024 and sell it today you would lose (156.00) from holding Public Storage or give up 8.07% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Americold Realty Trust  vs.  Public Storage

Americold Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Americold Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's essential indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

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. Even with latest weak performance, the Preferred Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Americold Realty and Public Storage

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

The idea behind Americold Realty Trust and Public 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.