Correlation Between Centuria Industrial and Kip McGrath
Can any of the company-specific risk be diversified away by investing in both Centuria Industrial and Kip McGrath 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 Kip McGrath 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 Kip McGrath Education, you can compare the effects of market volatilities on Centuria Industrial and Kip McGrath 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 Kip McGrath. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centuria Industrial and Kip McGrath.
Diversification Opportunities for Centuria Industrial and Kip McGrath
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Centuria and Kip is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Centuria Industrial Reit and Kip McGrath Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kip McGrath Education 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 Kip McGrath. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kip McGrath Education has no effect on the direction of Centuria Industrial i.e., Centuria Industrial and Kip McGrath go up and down completely randomly.
Pair Corralation between Centuria Industrial and Kip McGrath
Assuming the 90 days trading horizon Centuria Industrial Reit is expected to generate 0.29 times more return on investment than Kip McGrath. However, Centuria Industrial Reit is 3.44 times less risky than Kip McGrath. It trades about 0.0 of its potential returns per unit of risk. Kip McGrath Education is currently generating about -0.01 per unit of risk. If you would invest 293.00 in Centuria Industrial Reit on October 12, 2024 and sell it today you would lose (10.00) from holding Centuria Industrial Reit or give up 3.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centuria Industrial Reit vs. Kip McGrath Education
Performance |
| Timeline |
| Centuria Industrial Reit |
| Kip McGrath Education |
Centuria Industrial and Kip McGrath Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centuria Industrial and Kip McGrath
The main advantage of trading using opposite Centuria Industrial and Kip McGrath positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centuria Industrial position performs unexpectedly, Kip McGrath 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 Kip McGrath will offset losses from the drop in Kip McGrath's long position.| Centuria Industrial vs. Premier Investments | Centuria Industrial vs. FireFly Metals | Centuria Industrial vs. Sandon Capital Investments | Centuria Industrial vs. Mirrabooka Investments |
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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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