Correlation Between CENTURIA OFFICE and DFS Furniture
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and DFS Furniture 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 DFS Furniture 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 DFS Furniture PLC, you can compare the effects of market volatilities on CENTURIA OFFICE and DFS Furniture 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 DFS Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and DFS Furniture.
Diversification Opportunities for CENTURIA OFFICE and DFS Furniture
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between CENTURIA and DFS is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and DFS Furniture PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFS Furniture PLC 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 DFS Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFS Furniture PLC has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and DFS Furniture go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and DFS Furniture
Assuming the 90 days horizon CENTURIA OFFICE is expected to generate 2.31 times less return on investment than DFS Furniture. But when comparing it to its historical volatility, CENTURIA OFFICE REIT is 1.87 times less risky than DFS Furniture. It trades about 0.06 of its potential returns per unit of risk. DFS Furniture PLC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 130.00 in DFS Furniture PLC on September 2, 2024 and sell it today you would earn a total of 32.00 from holding DFS Furniture PLC or generate 24.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CENTURIA OFFICE REIT vs. DFS Furniture PLC
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| DFS Furniture PLC |
CENTURIA OFFICE and DFS Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and DFS Furniture
The main advantage of trading using opposite CENTURIA OFFICE and DFS Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, DFS Furniture 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 DFS Furniture will offset losses from the drop in DFS Furniture's long position.| CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc |
| DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple Inc | DFS Furniture vs. Apple 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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