Correlation Between CENTURIA OFFICE and Tokyo Electron
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and Tokyo Electron 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 Tokyo Electron 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 Tokyo Electron Limited, you can compare the effects of market volatilities on CENTURIA OFFICE and Tokyo Electron 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 Tokyo Electron. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and Tokyo Electron.
Diversification Opportunities for CENTURIA OFFICE and Tokyo Electron
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CENTURIA and Tokyo is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and Tokyo Electron Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tokyo Electron 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 Tokyo Electron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tokyo Electron has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and Tokyo Electron go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and Tokyo Electron
Assuming the 90 days horizon CENTURIA OFFICE is expected to generate 1.17 times less return on investment than Tokyo Electron. But when comparing it to its historical volatility, CENTURIA OFFICE REIT is 2.0 times less risky than Tokyo Electron. It trades about 0.05 of its potential returns per unit of risk. Tokyo Electron Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 13,540 in Tokyo Electron Limited on September 1, 2024 and sell it today you would earn a total of 1,370 from holding Tokyo Electron Limited or generate 10.12% 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. Tokyo Electron Limited
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| Tokyo Electron |
CENTURIA OFFICE and Tokyo Electron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and Tokyo Electron
The main advantage of trading using opposite CENTURIA OFFICE and Tokyo Electron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, Tokyo Electron 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 Tokyo Electron will offset losses from the drop in Tokyo Electron's long position.| CENTURIA OFFICE vs. Rayonier Advanced Materials | CENTURIA OFFICE vs. EMBARK EDUCATION LTD | CENTURIA OFFICE vs. Mitsubishi Materials | CENTURIA OFFICE vs. TAL Education Group |
| Tokyo Electron vs. Cleanaway Waste Management | Tokyo Electron vs. IMPERIAL TOBACCO | Tokyo Electron vs. JAPAN TOBACCO UNSPADR12 | Tokyo Electron vs. AIR PRODCHEMICALS |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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