Correlation Between Centuria Industrial and ACDC Metals
Can any of the company-specific risk be diversified away by investing in both Centuria Industrial and ACDC Metals 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 ACDC Metals 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 ACDC Metals, you can compare the effects of market volatilities on Centuria Industrial and ACDC Metals 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 ACDC Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centuria Industrial and ACDC Metals.
Diversification Opportunities for Centuria Industrial and ACDC Metals
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centuria and ACDC is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Centuria Industrial Reit and ACDC Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACDC Metals 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 ACDC Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACDC Metals has no effect on the direction of Centuria Industrial i.e., Centuria Industrial and ACDC Metals go up and down completely randomly.
Pair Corralation between Centuria Industrial and ACDC Metals
Assuming the 90 days trading horizon Centuria Industrial Reit is expected to generate 0.21 times more return on investment than ACDC Metals. However, Centuria Industrial Reit is 4.83 times less risky than ACDC Metals. It trades about -0.29 of its potential returns per unit of risk. ACDC Metals is currently generating about -0.34 per unit of risk. If you would invest 309.00 in Centuria Industrial Reit on August 27, 2024 and sell it today you would lose (11.00) from holding Centuria Industrial Reit or give up 3.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centuria Industrial Reit vs. ACDC Metals
Performance |
| Timeline |
| Centuria Industrial Reit |
| ACDC Metals |
Centuria Industrial and ACDC Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centuria Industrial and ACDC Metals
The main advantage of trading using opposite Centuria Industrial and ACDC Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centuria Industrial position performs unexpectedly, ACDC Metals 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 ACDC Metals will offset losses from the drop in ACDC Metals' 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 |
| ACDC Metals vs. Northern Star Resources | ACDC Metals vs. Evolution Mining | ACDC Metals vs. Bluescope Steel | ACDC Metals vs. Sandfire Resources NL |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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