Correlation Between Centuria Industrial and Carlton Investments
Can any of the company-specific risk be diversified away by investing in both Centuria Industrial and Carlton Investments 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 Carlton Investments 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 Carlton Investments, you can compare the effects of market volatilities on Centuria Industrial and Carlton Investments 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 Carlton Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centuria Industrial and Carlton Investments.
Diversification Opportunities for Centuria Industrial and Carlton Investments
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Centuria and Carlton is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Centuria Industrial Reit and Carlton Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carlton Investments 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 Carlton Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carlton Investments has no effect on the direction of Centuria Industrial i.e., Centuria Industrial and Carlton Investments go up and down completely randomly.
Pair Corralation between Centuria Industrial and Carlton Investments
Assuming the 90 days trading horizon Centuria Industrial Reit is expected to generate 1.27 times more return on investment than Carlton Investments. However, Centuria Industrial is 1.27 times more volatile than Carlton Investments. It trades about 0.03 of its potential returns per unit of risk. Carlton Investments is currently generating about -0.11 per unit of risk. If you would invest 280.00 in Centuria Industrial Reit on October 17, 2024 and sell it today you would earn a total of 2.00 from holding Centuria Industrial Reit or generate 0.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centuria Industrial Reit vs. Carlton Investments
Performance |
| Timeline |
| Centuria Industrial Reit |
| Carlton Investments |
Centuria Industrial and Carlton Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centuria Industrial and Carlton Investments
The main advantage of trading using opposite Centuria Industrial and Carlton Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centuria Industrial position performs unexpectedly, Carlton Investments 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 Carlton Investments will offset losses from the drop in Carlton Investments' long position.| Centuria Industrial vs. Insurance Australia Group | Centuria Industrial vs. Auswide Bank | Centuria Industrial vs. Latitude Financial Services | Centuria Industrial vs. Liberty Financial Group |
| Carlton Investments vs. Queste Communications | Carlton Investments vs. Iron Road | Carlton Investments vs. Charter Hall Retail | Carlton Investments vs. Tombador Iron |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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