Correlation Between CENTURIA OFFICE and Highlight Communications
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and Highlight Communications 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 Highlight Communications 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 Highlight Communications AG, you can compare the effects of market volatilities on CENTURIA OFFICE and Highlight Communications 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 Highlight Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and Highlight Communications.
Diversification Opportunities for CENTURIA OFFICE and Highlight Communications
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CENTURIA and Highlight is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and Highlight Communications AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highlight Communications 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 Highlight Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highlight Communications has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and Highlight Communications go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and Highlight Communications
Assuming the 90 days horizon CENTURIA OFFICE is expected to generate 67.19 times less return on investment than Highlight Communications. But when comparing it to its historical volatility, CENTURIA OFFICE REIT is 2.45 times less risky than Highlight Communications. It trades about 0.01 of its potential returns per unit of risk. Highlight Communications AG is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 133.00 in Highlight Communications AG on November 7, 2024 and sell it today you would earn a total of 21.00 from holding Highlight Communications AG or generate 15.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
CENTURIA OFFICE REIT vs. Highlight Communications AG
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| Highlight Communications |
CENTURIA OFFICE and Highlight Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and Highlight Communications
The main advantage of trading using opposite CENTURIA OFFICE and Highlight Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, Highlight Communications 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 Highlight Communications will offset losses from the drop in Highlight Communications' long position.| CENTURIA OFFICE vs. RETAIL FOOD GROUP | CENTURIA OFFICE vs. BURLINGTON STORES | CENTURIA OFFICE vs. National Retail Properties | CENTURIA OFFICE vs. Warner Music Group |
| Highlight Communications vs. OAKTRSPECLENDNEW | Highlight Communications vs. Khiron Life Sciences | Highlight Communications vs. UNICREDIT SPA ADR | Highlight Communications vs. United States Steel |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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