Correlation Between CENTURIA OFFICE and GEELY AUTOMOBILE
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE 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 GEELY AUTOMOBILE, you can compare the effects of market volatilities on CENTURIA OFFICE and GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and GEELY AUTOMOBILE.
Diversification Opportunities for CENTURIA OFFICE and GEELY AUTOMOBILE
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CENTURIA and GEELY is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and GEELY AUTOMOBILE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GEELY AUTOMOBILE 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 GEELY AUTOMOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GEELY AUTOMOBILE has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and GEELY AUTOMOBILE go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and GEELY AUTOMOBILE
Assuming the 90 days horizon CENTURIA OFFICE is expected to generate 6.57 times less return on investment than GEELY AUTOMOBILE. But when comparing it to its historical volatility, CENTURIA OFFICE REIT is 2.34 times less risky than GEELY AUTOMOBILE. It trades about 0.05 of its potential returns per unit of risk. GEELY AUTOMOBILE is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 94.00 in GEELY AUTOMOBILE on September 1, 2024 and sell it today you would earn a total of 74.00 from holding GEELY AUTOMOBILE or generate 78.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CENTURIA OFFICE REIT vs. GEELY AUTOMOBILE
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| GEELY AUTOMOBILE |
CENTURIA OFFICE and GEELY AUTOMOBILE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and GEELY AUTOMOBILE
The main advantage of trading using opposite CENTURIA OFFICE and GEELY AUTOMOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, GEELY AUTOMOBILE 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 GEELY AUTOMOBILE will offset losses from the drop in GEELY AUTOMOBILE'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 |
| GEELY AUTOMOBILE vs. SIVERS SEMICONDUCTORS AB | GEELY AUTOMOBILE vs. Darden Restaurants | GEELY AUTOMOBILE vs. Reliance Steel Aluminum | GEELY AUTOMOBILE vs. Q2M Managementberatung 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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