Correlation Between Carindale Property and Australian Unity
Can any of the company-specific risk be diversified away by investing in both Carindale Property and Australian Unity 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 Carindale Property and Australian Unity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Carindale Property Trust and Australian Unity Office, you can compare the effects of market volatilities on Carindale Property and Australian Unity 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 Carindale Property with a short position of Australian Unity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carindale Property and Australian Unity.
Diversification Opportunities for Carindale Property and Australian Unity
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Carindale and Australian is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Carindale Property Trust and Australian Unity Office in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Unity Office and Carindale Property 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 Carindale Property Trust are associated (or correlated) with Australian Unity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Unity Office has no effect on the direction of Carindale Property i.e., Carindale Property and Australian Unity go up and down completely randomly.
Pair Corralation between Carindale Property and Australian Unity
Assuming the 90 days trading horizon Carindale Property Trust is expected to generate 0.79 times more return on investment than Australian Unity. However, Carindale Property Trust is 1.27 times less risky than Australian Unity. It trades about 0.12 of its potential returns per unit of risk. Australian Unity Office is currently generating about -0.2 per unit of risk. If you would invest 461.00 in Carindale Property Trust on August 29, 2024 and sell it today you would earn a total of 11.00 from holding Carindale Property Trust or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carindale Property Trust vs. Australian Unity Office
Performance |
| Timeline |
| Carindale Property Trust |
| Australian Unity Office |
Carindale Property and Australian Unity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carindale Property and Australian Unity
The main advantage of trading using opposite Carindale Property and Australian Unity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carindale Property position performs unexpectedly, Australian Unity 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 Australian Unity will offset losses from the drop in Australian Unity's long position.| Carindale Property vs. Cromwell Property Group | Carindale Property vs. GDI Property Group | Carindale Property vs. Australian Unity Office |
| Australian Unity vs. Clime Investment Management | Australian Unity vs. ACDC Metals | Australian Unity vs. Group 6 Metals | Australian Unity vs. Neurotech International |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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