Correlation Between CENTURIA OFFICE and Haier Smart
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and Haier Smart 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 Haier Smart 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 Haier Smart Home, you can compare the effects of market volatilities on CENTURIA OFFICE and Haier Smart 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 Haier Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and Haier Smart.
Diversification Opportunities for CENTURIA OFFICE and Haier Smart
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CENTURIA and Haier is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and Haier Smart Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haier Smart Home 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 Haier Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haier Smart Home has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and Haier Smart go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and Haier Smart
Assuming the 90 days horizon CENTURIA OFFICE REIT is expected to generate 1.11 times more return on investment than Haier Smart. However, CENTURIA OFFICE is 1.11 times more volatile than Haier Smart Home. It trades about 0.01 of its potential returns per unit of risk. Haier Smart Home is currently generating about -0.01 per unit of risk. If you would invest 68.00 in CENTURIA OFFICE REIT on November 6, 2024 and sell it today you would earn a total of 0.00 from holding CENTURIA OFFICE REIT or generate 0.0% 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. Haier Smart Home
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| Haier Smart Home |
CENTURIA OFFICE and Haier Smart Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and Haier Smart
The main advantage of trading using opposite CENTURIA OFFICE and Haier Smart positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, Haier Smart 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 Haier Smart will offset losses from the drop in Haier Smart's long position.| CENTURIA OFFICE vs. CN MODERN DAIRY | CENTURIA OFFICE vs. Air Transport Services | CENTURIA OFFICE vs. Texas Roadhouse | CENTURIA OFFICE vs. Axfood AB |
| Haier Smart vs. Pentair plc | Haier Smart vs. MTY Food Group | Haier Smart vs. Air New Zealand | Haier Smart vs. ALTAIR RES INC |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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