Correlation Between Centuria Industrial and Australian Agri
Can any of the company-specific risk be diversified away by investing in both Centuria Industrial and Australian Agri 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 Industrial and Australian Agri into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centuria Industrial Reit and Australian Agri Projects, you can compare the effects of market volatilities on Centuria Industrial and Australian Agri 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 Industrial with a short position of Australian Agri. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centuria Industrial and Australian Agri.
Diversification Opportunities for Centuria Industrial and Australian Agri
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Centuria and Australian is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Centuria Industrial Reit and Australian Agri Projects in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian Agri Projects and Centuria Industrial 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 Industrial Reit are associated (or correlated) with Australian Agri. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian Agri Projects has no effect on the direction of Centuria Industrial i.e., Centuria Industrial and Australian Agri go up and down completely randomly.
Pair Corralation between Centuria Industrial and Australian Agri
Assuming the 90 days trading horizon Centuria Industrial is expected to generate 230.65 times less return on investment than Australian Agri. But when comparing it to its historical volatility, Centuria Industrial Reit is 5.53 times less risky than Australian Agri. It trades about 0.0 of its potential returns per unit of risk. Australian Agri Projects is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Australian Agri Projects on September 14, 2024 and sell it today you would earn a total of 2.80 from holding Australian Agri Projects or generate 140.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centuria Industrial Reit vs. Australian Agri Projects
Performance |
| Timeline |
| Centuria Industrial Reit |
| Australian Agri Projects |
Centuria Industrial and Australian Agri Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centuria Industrial and Australian Agri
The main advantage of trading using opposite Centuria Industrial and Australian Agri positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centuria Industrial position performs unexpectedly, Australian Agri 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 Agri will offset losses from the drop in Australian Agri's long position.| Centuria Industrial vs. Aussie Broadband | Centuria Industrial vs. Aurelia Metals | Centuria Industrial vs. Air New Zealand | Centuria Industrial vs. Gold Road Resources |
| Australian Agri vs. DY6 Metals | Australian Agri vs. Perseus Mining | Australian Agri vs. Dalaroo Metals | Australian Agri vs. Group 6 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 CEOs Directory module to screen CEOs from public companies around the world.
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