Correlation Between CENTURIA OFFICE and LIFE +
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and LIFE + 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 LIFE + 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 LIFE BANC SPLIT, you can compare the effects of market volatilities on CENTURIA OFFICE and LIFE + 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 LIFE +. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and LIFE +.
Diversification Opportunities for CENTURIA OFFICE and LIFE +
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CENTURIA and LIFE is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and LIFE BANC SPLIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LIFE BANC SPLIT 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 LIFE +. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LIFE BANC SPLIT has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and LIFE + go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and LIFE +
Assuming the 90 days horizon CENTURIA OFFICE REIT is expected to under-perform the LIFE +. But the stock apears to be less risky and, when comparing its historical volatility, CENTURIA OFFICE REIT is 1.7 times less risky than LIFE +. The stock trades about -0.26 of its potential returns per unit of risk. The LIFE BANC SPLIT is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 594.00 in LIFE BANC SPLIT on September 14, 2024 and sell it today you would earn a total of 26.00 from holding LIFE BANC SPLIT or generate 4.38% 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. LIFE BANC SPLIT
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| LIFE BANC SPLIT |
CENTURIA OFFICE and LIFE + Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and LIFE +
The main advantage of trading using opposite CENTURIA OFFICE and LIFE + positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, LIFE + 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 LIFE + will offset losses from the drop in LIFE +'s long position.| CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc |
| LIFE + vs. AOI Electronics Co | LIFE + vs. TAL Education Group | LIFE + vs. EMBARK EDUCATION LTD | LIFE + vs. DeVry Education Group |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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