Correlation Between Neinor Homes and CENTURIA OFFICE
Can any of the company-specific risk be diversified away by investing in both Neinor Homes and CENTURIA OFFICE 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 Neinor Homes and CENTURIA OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Neinor Homes SA and CENTURIA OFFICE REIT, you can compare the effects of market volatilities on Neinor Homes and CENTURIA OFFICE 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 Neinor Homes with a short position of CENTURIA OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Neinor Homes and CENTURIA OFFICE.
Diversification Opportunities for Neinor Homes and CENTURIA OFFICE
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Neinor and CENTURIA is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Neinor Homes SA and CENTURIA OFFICE REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTURIA OFFICE REIT and Neinor Homes 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 Neinor Homes SA are associated (or correlated) with CENTURIA OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTURIA OFFICE REIT has no effect on the direction of Neinor Homes i.e., Neinor Homes and CENTURIA OFFICE go up and down completely randomly.
Pair Corralation between Neinor Homes and CENTURIA OFFICE
Assuming the 90 days trading horizon Neinor Homes is expected to generate 9.49 times less return on investment than CENTURIA OFFICE. But when comparing it to its historical volatility, Neinor Homes SA is 1.01 times less risky than CENTURIA OFFICE. It trades about 0.01 of its potential returns per unit of risk. CENTURIA OFFICE REIT is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 71.00 in CENTURIA OFFICE REIT on August 29, 2024 and sell it today you would earn a total of 1.00 from holding CENTURIA OFFICE REIT or generate 1.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Neinor Homes SA vs. CENTURIA OFFICE REIT
Performance |
| Timeline |
| Neinor Homes SA |
| CENTURIA OFFICE REIT |
Neinor Homes and CENTURIA OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Neinor Homes and CENTURIA OFFICE
The main advantage of trading using opposite Neinor Homes and CENTURIA OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Neinor Homes position performs unexpectedly, CENTURIA OFFICE 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 CENTURIA OFFICE will offset losses from the drop in CENTURIA OFFICE's long position.| Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc | Neinor Homes vs. Apple Inc |
| CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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