Correlation Between CENTURIA OFFICE and Air New
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and Air New 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 Air New 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 Air New Zealand, you can compare the effects of market volatilities on CENTURIA OFFICE and Air New 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 Air New. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and Air New.
Diversification Opportunities for CENTURIA OFFICE and Air New
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CENTURIA and Air is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and Air New Zealand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air New Zealand 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 Air New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air New Zealand has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and Air New go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and Air New
Assuming the 90 days horizon CENTURIA OFFICE REIT is expected to generate 1.27 times more return on investment than Air New. However, CENTURIA OFFICE is 1.27 times more volatile than Air New Zealand. It trades about 0.14 of its potential returns per unit of risk. Air New Zealand is currently generating about 0.09 per unit of risk. If you would invest 63.00 in CENTURIA OFFICE REIT on November 1, 2024 and sell it today you would earn a total of 4.00 from holding CENTURIA OFFICE REIT or generate 6.35% 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. Air New Zealand
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| Air New Zealand |
CENTURIA OFFICE and Air New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and Air New
The main advantage of trading using opposite CENTURIA OFFICE and Air New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, Air New 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 Air New will offset losses from the drop in Air New's long position.| CENTURIA OFFICE vs. Perdoceo Education | CENTURIA OFFICE vs. Brockhaus Capital Management | CENTURIA OFFICE vs. FRACTAL GAMING GROUP | CENTURIA OFFICE vs. Corsair Gaming |
| Air New vs. INFORMATION SVC GRP | Air New vs. Teradata Corp | Air New vs. Corporate Office Properties | Air New vs. Northern Data AG |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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