Correlation Between CENTURIA OFFICE and GFL ENVIRONM
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and GFL ENVIRONM 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 GFL ENVIRONM 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 GFL ENVIRONM, you can compare the effects of market volatilities on CENTURIA OFFICE and GFL ENVIRONM 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 GFL ENVIRONM. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and GFL ENVIRONM.
Diversification Opportunities for CENTURIA OFFICE and GFL ENVIRONM
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CENTURIA and GFL is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and GFL ENVIRONM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GFL ENVIRONM 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 GFL ENVIRONM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GFL ENVIRONM has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and GFL ENVIRONM go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and GFL ENVIRONM
Assuming the 90 days horizon CENTURIA OFFICE is expected to generate 10.57 times less return on investment than GFL ENVIRONM. But when comparing it to its historical volatility, CENTURIA OFFICE REIT is 1.69 times less risky than GFL ENVIRONM. It trades about 0.06 of its potential returns per unit of risk. GFL ENVIRONM is currently generating about 0.38 of returns per unit of risk over similar time horizon. If you would invest 3,720 in GFL ENVIRONM on August 28, 2024 and sell it today you would earn a total of 640.00 from holding GFL ENVIRONM or generate 17.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CENTURIA OFFICE REIT vs. GFL ENVIRONM
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| GFL ENVIRONM |
CENTURIA OFFICE and GFL ENVIRONM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and GFL ENVIRONM
The main advantage of trading using opposite CENTURIA OFFICE and GFL ENVIRONM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, GFL ENVIRONM 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 GFL ENVIRONM will offset losses from the drop in GFL ENVIRONM's long position.| CENTURIA OFFICE vs. Performance Food Group | CENTURIA OFFICE vs. VIVA WINE GROUP | CENTURIA OFFICE vs. DeVry Education Group | CENTURIA OFFICE vs. TreeHouse Foods |
| GFL ENVIRONM vs. Superior Plus Corp | GFL ENVIRONM vs. NMI Holdings | GFL ENVIRONM vs. Origin Agritech | GFL ENVIRONM vs. SIVERS SEMICONDUCTORS AB |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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