Correlation Between Centuria Industrial and Centuria Capital
Can any of the company-specific risk be diversified away by investing in both Centuria Industrial and Centuria Capital 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 Centuria Capital 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 Centuria Capital, you can compare the effects of market volatilities on Centuria Industrial and Centuria Capital 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 Centuria Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centuria Industrial and Centuria Capital.
Diversification Opportunities for Centuria Industrial and Centuria Capital
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Centuria and Centuria is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Centuria Industrial Reit and Centuria Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centuria Capital 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 Centuria Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centuria Capital has no effect on the direction of Centuria Industrial i.e., Centuria Industrial and Centuria Capital go up and down completely randomly.
Pair Corralation between Centuria Industrial and Centuria Capital
Assuming the 90 days trading horizon Centuria Industrial Reit is expected to under-perform the Centuria Capital. But the stock apears to be less risky and, when comparing its historical volatility, Centuria Industrial Reit is 2.68 times less risky than Centuria Capital. The stock trades about -0.28 of its potential returns per unit of risk. The Centuria Capital is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 179.00 in Centuria Capital on September 14, 2024 and sell it today you would earn a total of 9.00 from holding Centuria Capital or generate 5.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centuria Industrial Reit vs. Centuria Capital
Performance |
| Timeline |
| Centuria Industrial Reit |
| Centuria Capital |
Centuria Industrial and Centuria Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centuria Industrial and Centuria Capital
The main advantage of trading using opposite Centuria Industrial and Centuria Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centuria Industrial position performs unexpectedly, Centuria Capital 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 Centuria Capital will offset losses from the drop in Centuria Capital'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 |
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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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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