Correlation Between Centuria Industrial and Macquarie
Can any of the company-specific risk be diversified away by investing in both Centuria Industrial and Macquarie 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 Macquarie 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 Macquarie Group, you can compare the effects of market volatilities on Centuria Industrial and Macquarie 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 Macquarie. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centuria Industrial and Macquarie.
Diversification Opportunities for Centuria Industrial and Macquarie
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Centuria and Macquarie is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Centuria Industrial Reit and Macquarie Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Macquarie 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 Macquarie. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Macquarie Group has no effect on the direction of Centuria Industrial i.e., Centuria Industrial and Macquarie go up and down completely randomly.
Pair Corralation between Centuria Industrial and Macquarie
Assuming the 90 days trading horizon Centuria Industrial Reit is expected to under-perform the Macquarie. But the stock apears to be less risky and, when comparing its historical volatility, Centuria Industrial Reit is 1.76 times less risky than Macquarie. The stock trades about -0.19 of its potential returns per unit of risk. The Macquarie Group is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 21,975 in Macquarie Group on September 5, 2024 and sell it today you would earn a total of 1,388 from holding Macquarie Group or generate 6.32% 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. Macquarie Group
Performance |
| Timeline |
| Centuria Industrial Reit |
| Macquarie Group |
Centuria Industrial and Macquarie Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centuria Industrial and Macquarie
The main advantage of trading using opposite Centuria Industrial and Macquarie positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centuria Industrial position performs unexpectedly, Macquarie 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 Macquarie will offset losses from the drop in Macquarie's long position.| Centuria Industrial vs. Scentre Group | Centuria Industrial vs. Vicinity Centres Re | Centuria Industrial vs. Charter Hall Retail | Centuria Industrial vs. Carindale Property Trust |
| Macquarie vs. 29Metals | Macquarie vs. Black Rock Mining | Macquarie vs. Stelar Metals | Macquarie vs. Centuria Industrial Reit |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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