Correlation Between CENTURIA OFFICE and X FAB
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and X FAB 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 X FAB 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 X FAB Silicon Foundries, you can compare the effects of market volatilities on CENTURIA OFFICE and X FAB 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 X FAB. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and X FAB.
Diversification Opportunities for CENTURIA OFFICE and X FAB
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between CENTURIA and XFB is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and X FAB Silicon Foundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on X FAB Silicon 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 X FAB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of X FAB Silicon has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and X FAB go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and X FAB
Assuming the 90 days horizon CENTURIA OFFICE REIT is expected to generate 0.98 times more return on investment than X FAB. However, CENTURIA OFFICE REIT is 1.02 times less risky than X FAB. It trades about 0.28 of its potential returns per unit of risk. X FAB Silicon Foundries is currently generating about 0.02 per unit of risk. If you would invest 58.00 in CENTURIA OFFICE REIT on October 28, 2024 and sell it today you would earn a total of 9.00 from holding CENTURIA OFFICE REIT or generate 15.52% 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. X FAB Silicon Foundries
Performance |
| Timeline |
| CENTURIA OFFICE REIT |
| X FAB Silicon |
CENTURIA OFFICE and X FAB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTURIA OFFICE and X FAB
The main advantage of trading using opposite CENTURIA OFFICE and X FAB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, X FAB 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 X FAB will offset losses from the drop in X FAB's long position.| CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc |
| X FAB vs. ELMOS SEMICONDUCTOR | X FAB vs. LG Display Co | X FAB vs. PLAYWAY SA ZY 10 | X FAB vs. MagnaChip Semiconductor Corp |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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