Correlation Between CENTURIA OFFICE and Commercial Vehicle
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and Commercial Vehicle 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 Commercial Vehicle 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 Commercial Vehicle Group, you can compare the effects of market volatilities on CENTURIA OFFICE and Commercial Vehicle 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 Commercial Vehicle. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and Commercial Vehicle.
Diversification Opportunities for CENTURIA OFFICE and Commercial Vehicle
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between CENTURIA and Commercial is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and Commercial Vehicle Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Commercial Vehicle 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 Commercial Vehicle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Commercial Vehicle has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and Commercial Vehicle go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and Commercial Vehicle
Assuming the 90 days horizon CENTURIA OFFICE REIT is expected to generate 0.34 times more return on investment than Commercial Vehicle. However, CENTURIA OFFICE REIT is 2.92 times less risky than Commercial Vehicle. It trades about 0.16 of its potential returns per unit of risk. Commercial Vehicle Group is currently generating about -0.2 per unit of risk. If you would invest 70.00 in CENTURIA OFFICE REIT on September 1, 2024 and sell it today you would earn a total of 3.00 from holding CENTURIA OFFICE REIT or generate 4.29% 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. Commercial Vehicle Group
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| Commercial Vehicle |
CENTURIA OFFICE and Commercial Vehicle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and Commercial Vehicle
The main advantage of trading using opposite CENTURIA OFFICE and Commercial Vehicle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, Commercial Vehicle 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 Commercial Vehicle will offset losses from the drop in Commercial Vehicle's long position.| CENTURIA OFFICE vs. Rayonier Advanced Materials | CENTURIA OFFICE vs. EMBARK EDUCATION LTD | CENTURIA OFFICE vs. Mitsubishi Materials | CENTURIA OFFICE vs. TAL Education Group |
| Commercial Vehicle vs. Apple Inc | Commercial Vehicle vs. Apple Inc | Commercial Vehicle vs. Apple Inc | Commercial Vehicle 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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