Correlation Between Centuria Industrial and Champion Iron
Can any of the company-specific risk be diversified away by investing in both Centuria Industrial and Champion Iron 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 Champion Iron 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 Champion Iron, you can compare the effects of market volatilities on Centuria Industrial and Champion Iron 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 Champion Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centuria Industrial and Champion Iron.
Diversification Opportunities for Centuria Industrial and Champion Iron
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Centuria and Champion is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Centuria Industrial Reit and Champion Iron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Iron 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 Champion Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Iron has no effect on the direction of Centuria Industrial i.e., Centuria Industrial and Champion Iron go up and down completely randomly.
Pair Corralation between Centuria Industrial and Champion Iron
Assuming the 90 days trading horizon Centuria Industrial is expected to generate 2.16 times less return on investment than Champion Iron. But when comparing it to its historical volatility, Centuria Industrial Reit is 2.27 times less risky than Champion Iron. It trades about 0.0 of its potential returns per unit of risk. Champion Iron is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 692.00 in Champion Iron on September 12, 2024 and sell it today you would lose (61.00) from holding Champion Iron or give up 8.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centuria Industrial Reit vs. Champion Iron
Performance |
| Timeline |
| Centuria Industrial Reit |
| Champion Iron |
Centuria Industrial and Champion Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centuria Industrial and Champion Iron
The main advantage of trading using opposite Centuria Industrial and Champion Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centuria Industrial position performs unexpectedly, Champion Iron 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 Champion Iron will offset losses from the drop in Champion Iron's long position.| Centuria Industrial vs. Red Hill Iron | Centuria Industrial vs. Iron Road | Centuria Industrial vs. Flagship Investments | Centuria Industrial vs. BKI Investment |
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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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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