Correlation Between CENTURIA OFFICE and Peel Mining
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and Peel Mining 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 Peel Mining 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 Peel Mining Limited, you can compare the effects of market volatilities on CENTURIA OFFICE and Peel Mining 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 Peel Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and Peel Mining.
Diversification Opportunities for CENTURIA OFFICE and Peel Mining
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CENTURIA and Peel is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and Peel Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peel Mining Limited 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 Peel Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peel Mining Limited has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and Peel Mining go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and Peel Mining
Assuming the 90 days horizon CENTURIA OFFICE REIT is expected to under-perform the Peel Mining. But the stock apears to be less risky and, when comparing its historical volatility, CENTURIA OFFICE REIT is 3.83 times less risky than Peel Mining. The stock trades about -0.11 of its potential returns per unit of risk. The Peel Mining Limited is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 6.60 in Peel Mining Limited on September 15, 2024 and sell it today you would earn a total of 0.35 from holding Peel Mining Limited or generate 5.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
CENTURIA OFFICE REIT vs. Peel Mining Limited
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| Peel Mining Limited |
CENTURIA OFFICE and Peel Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and Peel Mining
The main advantage of trading using opposite CENTURIA OFFICE and Peel Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, Peel Mining 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 Peel Mining will offset losses from the drop in Peel Mining's long position.| CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc |
| Peel Mining vs. CENTURIA OFFICE REIT | Peel Mining vs. Haverty Furniture Companies | Peel Mining vs. Tri Pointe Homes | Peel Mining vs. Cars Inc |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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