Correlation Between CENTURIA OFFICE and NEW PACIFIC
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and NEW PACIFIC 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 NEW PACIFIC 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 NEW PACIFIC METALS, you can compare the effects of market volatilities on CENTURIA OFFICE and NEW PACIFIC 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 NEW PACIFIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and NEW PACIFIC.
Diversification Opportunities for CENTURIA OFFICE and NEW PACIFIC
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CENTURIA and NEW is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and NEW PACIFIC METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEW PACIFIC METALS 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 NEW PACIFIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEW PACIFIC METALS has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and NEW PACIFIC go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and NEW PACIFIC
Assuming the 90 days horizon CENTURIA OFFICE REIT is expected to generate 0.4 times more return on investment than NEW PACIFIC. However, CENTURIA OFFICE REIT is 2.52 times less risky than NEW PACIFIC. It trades about 0.0 of its potential returns per unit of risk. NEW PACIFIC METALS is currently generating about -0.01 per unit of risk. If you would invest 74.00 in CENTURIA OFFICE REIT on November 4, 2024 and sell it today you would lose (6.00) from holding CENTURIA OFFICE REIT or give up 8.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CENTURIA OFFICE REIT vs. NEW PACIFIC METALS
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| NEW PACIFIC METALS |
CENTURIA OFFICE and NEW PACIFIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and NEW PACIFIC
The main advantage of trading using opposite CENTURIA OFFICE and NEW PACIFIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, NEW PACIFIC 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 NEW PACIFIC will offset losses from the drop in NEW PACIFIC's long position.| CENTURIA OFFICE vs. MAANSHAN IRON H | CENTURIA OFFICE vs. Mount Gibson Iron | CENTURIA OFFICE vs. CeoTronics AG | CENTURIA OFFICE vs. CARDINAL HEALTH |
| NEW PACIFIC vs. Hyatt Hotels | NEW PACIFIC vs. JIAHUA STORES | NEW PACIFIC vs. FAST RETAIL ADR | NEW PACIFIC vs. DALATA HOTEL |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device |