Correlation Between CENTURIA OFFICE and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and Sunny Optical 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 Sunny Optical 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 Sunny Optical Technology, you can compare the effects of market volatilities on CENTURIA OFFICE and Sunny Optical 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 Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and Sunny Optical.
Diversification Opportunities for CENTURIA OFFICE and Sunny Optical
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CENTURIA and Sunny is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and Sunny Optical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Optical Technology 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 Sunny Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Optical Technology has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and Sunny Optical go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and Sunny Optical
Assuming the 90 days horizon CENTURIA OFFICE REIT is expected to generate 0.43 times more return on investment than Sunny Optical. However, CENTURIA OFFICE REIT is 2.32 times less risky than Sunny Optical. It trades about 0.02 of its potential returns per unit of risk. Sunny Optical Technology is currently generating about 0.01 per unit of risk. If you would invest 68.00 in CENTURIA OFFICE REIT on August 31, 2024 and sell it today you would earn a total of 5.00 from holding CENTURIA OFFICE REIT or generate 7.35% 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. Sunny Optical Technology
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| Sunny Optical Technology |
CENTURIA OFFICE and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and Sunny Optical
The main advantage of trading using opposite CENTURIA OFFICE and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, Sunny Optical 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 Sunny Optical will offset losses from the drop in Sunny Optical's long position.| CENTURIA OFFICE vs. MHP Hotel AG | CENTURIA OFFICE vs. Playa Hotels Resorts | CENTURIA OFFICE vs. InterContinental Hotels Group | CENTURIA OFFICE vs. Meli Hotels International |
| Sunny Optical vs. ULTRA CLEAN HLDGS | Sunny Optical vs. USWE SPORTS AB | Sunny Optical vs. Universal Display | Sunny Optical vs. Treasury Wine Estates |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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