Correlation Between Pembina Pipeline and PUBLIC STORAGE

Can any of the company-specific risk be diversified away by investing in both Pembina Pipeline 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 Pembina Pipeline and PUBLIC STORAGE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Pembina Pipeline Corp and PUBLIC STORAGE PRFO, you can compare the effects of market volatilities on Pembina Pipeline 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 Pembina Pipeline with a short position of PUBLIC STORAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pembina Pipeline and PUBLIC STORAGE.

Diversification Opportunities for Pembina Pipeline and PUBLIC STORAGE

0.52

Correlation Coefficient

Pembina Pipeline  PUBLIC STORAGE

Very weak diversification

The 3 months correlation between Pembina and PUBLIC is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Pembina Pipeline Corp and PUBLIC STORAGE PRFO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUBLIC STORAGE PRFO and Pembina Pipeline 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 Pembina Pipeline Corp 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 PRFO has no effect on the direction of Pembina Pipeline i.e., Pembina Pipeline and PUBLIC STORAGE go up and down completely randomly.

Pair Corralation between Pembina Pipeline and PUBLIC STORAGE

Assuming the 90 days horizon Pembina Pipeline Corp is expected to generate 1.17 times more return on investment than PUBLIC STORAGE. However, Pembina Pipeline is 1.17 times more volatile than PUBLIC STORAGE PRFO. It trades about 0.11 of its potential returns per unit of risk. PUBLIC STORAGE PRFO is currently generating about 0.08 per unit of risk. If you would invest  3,569  in Pembina Pipeline Corp on September 3, 2024 and sell it today you would earn a total of  314.00  from holding Pembina Pipeline Corp or generate 8.8% return on investment over 90 days.

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

Pembina Pipeline Corp  vs.  PUBLIC STORAGE PRFO

Pembina Pipeline Corp

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Pembina Pipeline Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Pembina Pipeline may actually be approaching a critical reversion point that can send shares even higher in January 2025.

PUBLIC STORAGE PRFO

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in PUBLIC STORAGE PRFO are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Pembina Pipeline and PUBLIC STORAGE

The main advantage of trading using opposite Pembina Pipeline and PUBLIC STORAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pembina Pipeline 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 Pembina Pipeline Corp and PUBLIC STORAGE PRFO 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.