Correlation Between Centuria Industrial and Wildcat Resources
Can any of the company-specific risk be diversified away by investing in both Centuria Industrial and Wildcat Resources 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 Wildcat Resources 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 Wildcat Resources, you can compare the effects of market volatilities on Centuria Industrial and Wildcat Resources 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 Wildcat Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centuria Industrial and Wildcat Resources.
Diversification Opportunities for Centuria Industrial and Wildcat Resources
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Centuria and Wildcat is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Centuria Industrial Reit and Wildcat Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wildcat Resources 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 Wildcat Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wildcat Resources has no effect on the direction of Centuria Industrial i.e., Centuria Industrial and Wildcat Resources go up and down completely randomly.
Pair Corralation between Centuria Industrial and Wildcat Resources
Assuming the 90 days trading horizon Centuria Industrial Reit is expected to generate 0.17 times more return on investment than Wildcat Resources. However, Centuria Industrial Reit is 5.97 times less risky than Wildcat Resources. It trades about -0.06 of its potential returns per unit of risk. Wildcat Resources is currently generating about -0.03 per unit of risk. If you would invest 317.00 in Centuria Industrial Reit on October 12, 2024 and sell it today you would lose (34.00) from holding Centuria Industrial Reit or give up 10.73% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centuria Industrial Reit vs. Wildcat Resources
Performance |
| Timeline |
| Centuria Industrial Reit |
| Wildcat Resources |
Centuria Industrial and Wildcat Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centuria Industrial and Wildcat Resources
The main advantage of trading using opposite Centuria Industrial and Wildcat Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centuria Industrial position performs unexpectedly, Wildcat Resources 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 Wildcat Resources will offset losses from the drop in Wildcat Resources' long position.| Centuria Industrial vs. Stelar Metals | Centuria Industrial vs. ACDC Metals | Centuria Industrial vs. Black Rock Mining | Centuria Industrial vs. Westpac Banking |
| Wildcat Resources vs. Aeon Metals | Wildcat Resources vs. Centrex Metals | Wildcat Resources vs. Centuria Industrial Reit | Wildcat Resources vs. Aussie Broadband |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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