Correlation Between CENTURIA OFFICE and Home Depot
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and Home Depot 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 Home Depot 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 The Home Depot, you can compare the effects of market volatilities on CENTURIA OFFICE and Home Depot 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 Home Depot. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and Home Depot.
Diversification Opportunities for CENTURIA OFFICE and Home Depot
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CENTURIA and Home is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and The Home Depot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Depot 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 Home Depot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Depot has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and Home Depot go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and Home Depot
Assuming the 90 days horizon CENTURIA OFFICE REIT is expected to generate 2.48 times more return on investment than Home Depot. However, CENTURIA OFFICE is 2.48 times more volatile than The Home Depot. It trades about 0.13 of its potential returns per unit of risk. The Home Depot is currently generating about -0.34 per unit of risk. If you would invest 63.00 in CENTURIA OFFICE REIT on October 11, 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 | 94.44% |
| Values | Daily Returns |
CENTURIA OFFICE REIT vs. The Home Depot
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| Home Depot |
CENTURIA OFFICE and Home Depot Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and Home Depot
The main advantage of trading using opposite CENTURIA OFFICE and Home Depot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, Home Depot 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 Home Depot will offset losses from the drop in Home Depot's long position.| CENTURIA OFFICE vs. Computershare Limited | CENTURIA OFFICE vs. CAIRN HOMES EO | CENTURIA OFFICE vs. Addus HomeCare | CENTURIA OFFICE vs. Ribbon Communications |
| Home Depot vs. CENTURIA OFFICE REIT | Home Depot vs. Corporate Office Properties | Home Depot vs. Playtech plc | Home Depot vs. INTER CARS SA |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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