Correlation Between CENTURIA OFFICE and Lightbridge
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and Lightbridge 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 Lightbridge 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 Lightbridge, you can compare the effects of market volatilities on CENTURIA OFFICE and Lightbridge 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 Lightbridge. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and Lightbridge.
Diversification Opportunities for CENTURIA OFFICE and Lightbridge
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CENTURIA and Lightbridge is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and Lightbridge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lightbridge 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 Lightbridge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lightbridge has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and Lightbridge go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and Lightbridge
Assuming the 90 days horizon CENTURIA OFFICE is expected to generate 5.49 times less return on investment than Lightbridge. But when comparing it to its historical volatility, CENTURIA OFFICE REIT is 2.89 times less risky than Lightbridge. It trades about 0.1 of its potential returns per unit of risk. Lightbridge is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 419.00 in Lightbridge on October 21, 2024 and sell it today you would earn a total of 113.00 from holding Lightbridge or generate 26.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CENTURIA OFFICE REIT vs. Lightbridge
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| Lightbridge |
CENTURIA OFFICE and Lightbridge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and Lightbridge
The main advantage of trading using opposite CENTURIA OFFICE and Lightbridge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, Lightbridge 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 Lightbridge will offset losses from the drop in Lightbridge's long position.| CENTURIA OFFICE vs. ZURICH INSURANCE GROUP | CENTURIA OFFICE vs. Singapore Reinsurance | CENTURIA OFFICE vs. PTT Global Chemical | CENTURIA OFFICE vs. KINGBOARD CHEMICAL |
| Lightbridge vs. Focus Home Interactive | Lightbridge vs. Mitsui Chemicals | Lightbridge vs. Corporate Office Properties | Lightbridge vs. alstria office REIT 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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