Correlation Between Australian Strategic and Centuria Industrial
Can any of the company-specific risk be diversified away by investing in both Australian Strategic and Centuria Industrial 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 Australian Strategic and Centuria Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Australian Strategic Materials and Centuria Industrial Reit, you can compare the effects of market volatilities on Australian Strategic and Centuria Industrial 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 Australian Strategic with a short position of Centuria Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Australian Strategic and Centuria Industrial.
Diversification Opportunities for Australian Strategic and Centuria Industrial
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Australian and Centuria is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Australian Strategic Materials and Centuria Industrial Reit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centuria Industrial Reit and Australian Strategic 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 Australian Strategic Materials are associated (or correlated) with Centuria Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centuria Industrial Reit has no effect on the direction of Australian Strategic i.e., Australian Strategic and Centuria Industrial go up and down completely randomly.
Pair Corralation between Australian Strategic and Centuria Industrial
Assuming the 90 days trading horizon Australian Strategic Materials is expected to under-perform the Centuria Industrial. In addition to that, Australian Strategic is 2.03 times more volatile than Centuria Industrial Reit. It trades about -0.07 of its total potential returns per unit of risk. Centuria Industrial Reit is currently generating about 0.09 per unit of volatility. If you would invest 285.00 in Centuria Industrial Reit on October 29, 2024 and sell it today you would earn a total of 6.00 from holding Centuria Industrial Reit or generate 2.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Australian Strategic Materials vs. Centuria Industrial Reit
Performance |
| Timeline |
| Australian Strategic |
| Centuria Industrial Reit |
Australian Strategic and Centuria Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Australian Strategic and Centuria Industrial
The main advantage of trading using opposite Australian Strategic and Centuria Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Australian Strategic position performs unexpectedly, Centuria Industrial 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 Centuria Industrial will offset losses from the drop in Centuria Industrial's long position.| Australian Strategic vs. Medibank Private | Australian Strategic vs. BSP Financial Group | Australian Strategic vs. Ras Technology Holdings | Australian Strategic vs. Alternative Investment Trust |
| Centuria Industrial vs. Wt Financial Group | Centuria Industrial vs. National Australia Bank | Centuria Industrial vs. Ainsworth Game Technology | Centuria Industrial vs. Stelar Metals |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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