Correlation Between Centuria Industrial and Advanced Braking
Can any of the company-specific risk be diversified away by investing in both Centuria Industrial and Advanced Braking 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 Advanced Braking 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 Advanced Braking Technology, you can compare the effects of market volatilities on Centuria Industrial and Advanced Braking 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 Advanced Braking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centuria Industrial and Advanced Braking.
Diversification Opportunities for Centuria Industrial and Advanced Braking
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Centuria and Advanced is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Centuria Industrial Reit and Advanced Braking Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advanced Braking Tec 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 Advanced Braking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advanced Braking Tec has no effect on the direction of Centuria Industrial i.e., Centuria Industrial and Advanced Braking go up and down completely randomly.
Pair Corralation between Centuria Industrial and Advanced Braking
Assuming the 90 days trading horizon Centuria Industrial Reit is expected to under-perform the Advanced Braking. But the stock apears to be less risky and, when comparing its historical volatility, Centuria Industrial Reit is 3.98 times less risky than Advanced Braking. The stock trades about -0.29 of its potential returns per unit of risk. The Advanced Braking Technology is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 7.70 in Advanced Braking Technology on August 27, 2024 and sell it today you would earn a total of 1.10 from holding Advanced Braking Technology or generate 14.29% 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. Advanced Braking Technology
Performance |
| Timeline |
| Centuria Industrial Reit |
| Advanced Braking Tec |
Centuria Industrial and Advanced Braking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centuria Industrial and Advanced Braking
The main advantage of trading using opposite Centuria Industrial and Advanced Braking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centuria Industrial position performs unexpectedly, Advanced Braking 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 Advanced Braking will offset losses from the drop in Advanced Braking's long position.| Centuria Industrial vs. Scentre Group | Centuria Industrial vs. Vicinity Centres Re | Centuria Industrial vs. Charter Hall Retail | Centuria Industrial vs. Cromwell Property Group |
| Advanced Braking vs. Home Consortium | Advanced Braking vs. Air New Zealand | Advanced Braking vs. Duxton Broadacre Farms | Advanced Braking vs. Finexia Financial Group |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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