Correlation Between CENTURIA OFFICE and MEDIPAL HOLDINGS
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and MEDIPAL HOLDINGS 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 MEDIPAL HOLDINGS 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 MEDIPAL HOLDINGS P, you can compare the effects of market volatilities on CENTURIA OFFICE and MEDIPAL HOLDINGS 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 MEDIPAL HOLDINGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and MEDIPAL HOLDINGS.
Diversification Opportunities for CENTURIA OFFICE and MEDIPAL HOLDINGS
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between CENTURIA and MEDIPAL is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and MEDIPAL HOLDINGS P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEDIPAL HOLDINGS 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 MEDIPAL HOLDINGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEDIPAL HOLDINGS P has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and MEDIPAL HOLDINGS go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and MEDIPAL HOLDINGS
Assuming the 90 days horizon CENTURIA OFFICE is expected to generate 5.16 times less return on investment than MEDIPAL HOLDINGS. But when comparing it to its historical volatility, CENTURIA OFFICE REIT is 1.3 times less risky than MEDIPAL HOLDINGS. It trades about 0.06 of its potential returns per unit of risk. MEDIPAL HOLDINGS P is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 1,410 in MEDIPAL HOLDINGS P on September 4, 2024 and sell it today you would earn a total of 120.00 from holding MEDIPAL HOLDINGS P or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
CENTURIA OFFICE REIT vs. MEDIPAL HOLDINGS P
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| MEDIPAL HOLDINGS P |
CENTURIA OFFICE and MEDIPAL HOLDINGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and MEDIPAL HOLDINGS
The main advantage of trading using opposite CENTURIA OFFICE and MEDIPAL HOLDINGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, MEDIPAL HOLDINGS 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 MEDIPAL HOLDINGS will offset losses from the drop in MEDIPAL HOLDINGS's long position.| CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc |
| MEDIPAL HOLDINGS vs. EIDESVIK OFFSHORE NK | MEDIPAL HOLDINGS vs. Air New Zealand | MEDIPAL HOLDINGS vs. ALTAIR RES INC | MEDIPAL HOLDINGS vs. HF SINCLAIR P |
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.
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