Correlation Between Centuria Industrial and Ecofibre
Can any of the company-specific risk be diversified away by investing in both Centuria Industrial and Ecofibre 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 Ecofibre 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 Ecofibre, you can compare the effects of market volatilities on Centuria Industrial and Ecofibre 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 Ecofibre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centuria Industrial and Ecofibre.
Diversification Opportunities for Centuria Industrial and Ecofibre
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centuria and Ecofibre is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Centuria Industrial Reit and Ecofibre in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecofibre 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 Ecofibre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecofibre has no effect on the direction of Centuria Industrial i.e., Centuria Industrial and Ecofibre go up and down completely randomly.
Pair Corralation between Centuria Industrial and Ecofibre
Assuming the 90 days trading horizon Centuria Industrial Reit is expected to generate 0.15 times more return on investment than Ecofibre. However, Centuria Industrial Reit is 6.57 times less risky than Ecofibre. It trades about 0.01 of its potential returns per unit of risk. Ecofibre is currently generating about -0.03 per unit of risk. If you would invest 286.00 in Centuria Industrial Reit on September 13, 2024 and sell it today you would earn a total of 2.00 from holding Centuria Industrial Reit or generate 0.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centuria Industrial Reit vs. Ecofibre
Performance |
| Timeline |
| Centuria Industrial Reit |
| Ecofibre |
Centuria Industrial and Ecofibre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centuria Industrial and Ecofibre
The main advantage of trading using opposite Centuria Industrial and Ecofibre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centuria Industrial position performs unexpectedly, Ecofibre 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 Ecofibre will offset losses from the drop in Ecofibre's long position.| Centuria Industrial vs. Auctus Alternative Investments | Centuria Industrial vs. Carawine Resources Limited | Centuria Industrial vs. Mirrabooka Investments | Centuria Industrial vs. Embark Education Group |
| Ecofibre vs. Computershare | Ecofibre vs. Retail Food Group | Ecofibre vs. Hutchison Telecommunications | Ecofibre vs. Oneview Healthcare PLC |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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