Correlation Between CENTURIA OFFICE and Public Service
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and Public Service 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 Public Service 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 Public Service Enterprise, you can compare the effects of market volatilities on CENTURIA OFFICE and Public Service 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 Public Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and Public Service.
Diversification Opportunities for CENTURIA OFFICE and Public Service
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CENTURIA and Public is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and Public Service Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Service Enterprise 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 Public Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Service Enterprise has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and Public Service go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and Public Service
Assuming the 90 days horizon CENTURIA OFFICE REIT is expected to under-perform the Public Service. But the stock apears to be less risky and, when comparing its historical volatility, CENTURIA OFFICE REIT is 2.53 times less risky than Public Service. The stock trades about -0.2 of its potential returns per unit of risk. The Public Service Enterprise is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 1,081 in Public Service Enterprise on September 12, 2024 and sell it today you would earn a total of 559.00 from holding Public Service Enterprise or generate 51.71% 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. Public Service Enterprise
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| Public Service Enterprise |
CENTURIA OFFICE and Public Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and Public Service
The main advantage of trading using opposite CENTURIA OFFICE and Public Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, Public Service 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 Public Service will offset losses from the drop in Public Service's long position.| CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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