Correlation Between CENTURIA OFFICE and Aedas Homes
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and Aedas Homes 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 CENTURIA OFFICE and Aedas Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CENTURIA OFFICE REIT and Aedas Homes SA, you can compare the effects of market volatilities on CENTURIA OFFICE and Aedas Homes 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 CENTURIA OFFICE with a short position of Aedas Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and Aedas Homes.
Diversification Opportunities for CENTURIA OFFICE and Aedas Homes
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between CENTURIA and Aedas is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and Aedas Homes SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aedas Homes SA and CENTURIA OFFICE 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 CENTURIA OFFICE REIT are associated (or correlated) with Aedas Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aedas Homes SA has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and Aedas Homes go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and Aedas Homes
Assuming the 90 days horizon CENTURIA OFFICE is expected to generate 56.9 times less return on investment than Aedas Homes. But when comparing it to its historical volatility, CENTURIA OFFICE REIT is 1.38 times less risky than Aedas Homes. It trades about 0.01 of its potential returns per unit of risk. Aedas Homes SA is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest 2,580 in Aedas Homes SA on November 6, 2024 and sell it today you would earn a total of 345.00 from holding Aedas Homes SA or generate 13.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CENTURIA OFFICE REIT vs. Aedas Homes SA
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| Aedas Homes SA |
CENTURIA OFFICE and Aedas Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and Aedas Homes
The main advantage of trading using opposite CENTURIA OFFICE and Aedas Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, Aedas Homes 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 Aedas Homes will offset losses from the drop in Aedas Homes' long position.| CENTURIA OFFICE vs. CN MODERN DAIRY | CENTURIA OFFICE vs. Air Transport Services | CENTURIA OFFICE vs. Texas Roadhouse | CENTURIA OFFICE vs. Axfood AB |
| Aedas Homes vs. Daito Trust Construction | Aedas Homes vs. Titan Machinery | Aedas Homes vs. FIRST SHIP LEASE | Aedas Homes vs. WIMFARM SA EO |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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