Correlation Between Centuria Industrial and MA Financial
Can any of the company-specific risk be diversified away by investing in both Centuria Industrial and MA Financial 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 MA Financial 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 MA Financial Group, you can compare the effects of market volatilities on Centuria Industrial and MA Financial 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 MA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centuria Industrial and MA Financial.
Diversification Opportunities for Centuria Industrial and MA Financial
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Centuria and MAF is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Centuria Industrial Reit and MA Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MA Financial Group 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 MA Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MA Financial Group has no effect on the direction of Centuria Industrial i.e., Centuria Industrial and MA Financial go up and down completely randomly.
Pair Corralation between Centuria Industrial and MA Financial
Assuming the 90 days trading horizon Centuria Industrial is expected to generate 9.39 times less return on investment than MA Financial. But when comparing it to its historical volatility, Centuria Industrial Reit is 2.31 times less risky than MA Financial. It trades about 0.02 of its potential returns per unit of risk. MA Financial Group is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 381.00 in MA Financial Group on December 6, 2024 and sell it today you would earn a total of 427.00 from holding MA Financial Group or generate 112.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centuria Industrial Reit vs. MA Financial Group
Performance |
| Timeline |
| Centuria Industrial Reit |
| MA Financial Group |
Centuria Industrial and MA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centuria Industrial and MA Financial
The main advantage of trading using opposite Centuria Industrial and MA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centuria Industrial position performs unexpectedly, MA Financial 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 MA Financial will offset losses from the drop in MA Financial's long position.| Centuria Industrial vs. Gold Road Resources | Centuria Industrial vs. Carawine Resources Limited | Centuria Industrial vs. Australian United Investment | Centuria Industrial vs. ABACUS STORAGE KING |
| MA Financial vs. A1 Investments Resources | MA Financial vs. Navigator Global Investments | MA Financial vs. Collins Foods | MA Financial vs. Auctus Alternative Investments |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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