Correlation Between Centuria Industrial and Mach7 Technologies
Can any of the company-specific risk be diversified away by investing in both Centuria Industrial and Mach7 Technologies 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 Mach7 Technologies 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 Mach7 Technologies, you can compare the effects of market volatilities on Centuria Industrial and Mach7 Technologies 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 Mach7 Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centuria Industrial and Mach7 Technologies.
Diversification Opportunities for Centuria Industrial and Mach7 Technologies
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Centuria and Mach7 is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Centuria Industrial Reit and Mach7 Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mach7 Technologies 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 Mach7 Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mach7 Technologies has no effect on the direction of Centuria Industrial i.e., Centuria Industrial and Mach7 Technologies go up and down completely randomly.
Pair Corralation between Centuria Industrial and Mach7 Technologies
Assuming the 90 days trading horizon Centuria Industrial Reit is expected to generate 0.24 times more return on investment than Mach7 Technologies. However, Centuria Industrial Reit is 4.1 times less risky than Mach7 Technologies. It trades about -0.26 of its potential returns per unit of risk. Mach7 Technologies is currently generating about -0.27 per unit of risk. If you would invest 326.00 in Centuria Industrial Reit on August 28, 2024 and sell it today you would lose (28.00) from holding Centuria Industrial Reit or give up 8.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centuria Industrial Reit vs. Mach7 Technologies
Performance |
| Timeline |
| Centuria Industrial Reit |
| Mach7 Technologies |
Centuria Industrial and Mach7 Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centuria Industrial and Mach7 Technologies
The main advantage of trading using opposite Centuria Industrial and Mach7 Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centuria Industrial position performs unexpectedly, Mach7 Technologies 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 Mach7 Technologies will offset losses from the drop in Mach7 Technologies' long position.| Centuria Industrial vs. Scentre Group | Centuria Industrial vs. Vicinity Centres Re | Centuria Industrial vs. Charter Hall Retail | Centuria Industrial vs. Cromwell Property Group |
| Mach7 Technologies vs. Accent Resources NL | Mach7 Technologies vs. Hutchison Telecommunications | Mach7 Technologies vs. GO2 People | Mach7 Technologies vs. Pact Group Holdings |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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