Correlation Between Carindale Property and Aspen Group
Can any of the company-specific risk be diversified away by investing in both Carindale Property and Aspen Group 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 Aspen Group 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 Aspen Group Unit, you can compare the effects of market volatilities on Carindale Property and Aspen Group 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 Aspen Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carindale Property and Aspen Group.
Diversification Opportunities for Carindale Property and Aspen Group
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Carindale and Aspen is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Carindale Property Trust and Aspen Group Unit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aspen Group Unit 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 Aspen Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aspen Group Unit has no effect on the direction of Carindale Property i.e., Carindale Property and Aspen Group go up and down completely randomly.
Pair Corralation between Carindale Property and Aspen Group
Assuming the 90 days trading horizon Carindale Property is expected to generate 1.75 times less return on investment than Aspen Group. But when comparing it to its historical volatility, Carindale Property Trust is 1.21 times less risky than Aspen Group. It trades about 0.04 of its potential returns per unit of risk. Aspen Group Unit is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 169.00 in Aspen Group Unit on September 5, 2024 and sell it today you would earn a total of 91.00 from holding Aspen Group Unit or generate 53.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Carindale Property Trust vs. Aspen Group Unit
Performance |
| Timeline |
| Carindale Property Trust |
| Aspen Group Unit |
Carindale Property and Aspen Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Carindale Property and Aspen Group
The main advantage of trading using opposite Carindale Property and Aspen Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Carindale Property position performs unexpectedly, Aspen Group 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 Aspen Group will offset losses from the drop in Aspen Group's long position.| Carindale Property vs. Vicinity Centres Re | Carindale Property vs. Cromwell Property Group | Carindale Property vs. Australian Unity Office |
| Aspen Group vs. Scentre Group | Aspen Group vs. Vicinity Centres Re | Aspen Group vs. Charter Hall Retail | Aspen Group vs. Carindale Property Trust |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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