Correlation Between CENTURIA OFFICE and SITKA GOLD
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and SITKA GOLD 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 SITKA GOLD 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 SITKA GOLD P, you can compare the effects of market volatilities on CENTURIA OFFICE and SITKA GOLD 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 SITKA GOLD. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and SITKA GOLD.
Diversification Opportunities for CENTURIA OFFICE and SITKA GOLD
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CENTURIA and SITKA is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and SITKA GOLD P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SITKA GOLD P 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 SITKA GOLD. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SITKA GOLD P has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and SITKA GOLD go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and SITKA GOLD
Assuming the 90 days horizon CENTURIA OFFICE is expected to generate 16.17 times less return on investment than SITKA GOLD. But when comparing it to its historical volatility, CENTURIA OFFICE REIT is 4.7 times less risky than SITKA GOLD. It trades about 0.02 of its potential returns per unit of risk. SITKA GOLD P is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 9.95 in SITKA GOLD P on September 14, 2024 and sell it today you would earn a total of 13.05 from holding SITKA GOLD P or generate 131.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.64% |
| Values | Daily Returns |
CENTURIA OFFICE REIT vs. SITKA GOLD P
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| SITKA GOLD P |
CENTURIA OFFICE and SITKA GOLD Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and SITKA GOLD
The main advantage of trading using opposite CENTURIA OFFICE and SITKA GOLD positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, SITKA GOLD 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 SITKA GOLD will offset losses from the drop in SITKA GOLD's long position.| CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc |
| SITKA GOLD vs. Tower One Wireless | SITKA GOLD vs. CENTURIA OFFICE REIT | SITKA GOLD vs. Molson Coors Beverage | SITKA GOLD vs. CITY OFFICE REIT |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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