Correlation Between Flagship Investments and Scentre
Can any of the company-specific risk be diversified away by investing in both Flagship Investments and Scentre 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 Flagship Investments and Scentre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flagship Investments and Scentre Group, you can compare the effects of market volatilities on Flagship Investments and Scentre 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 Flagship Investments with a short position of Scentre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flagship Investments and Scentre.
Diversification Opportunities for Flagship Investments and Scentre
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Flagship and Scentre is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Flagship Investments and Scentre Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scentre Group and Flagship Investments 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 Flagship Investments are associated (or correlated) with Scentre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scentre Group has no effect on the direction of Flagship Investments i.e., Flagship Investments and Scentre go up and down completely randomly.
Pair Corralation between Flagship Investments and Scentre
Assuming the 90 days trading horizon Flagship Investments is expected to generate 1.07 times less return on investment than Scentre. In addition to that, Flagship Investments is 1.06 times more volatile than Scentre Group. It trades about 0.05 of its total potential returns per unit of risk. Scentre Group is currently generating about 0.06 per unit of volatility. If you would invest 262.00 in Scentre Group on November 1, 2024 and sell it today you would earn a total of 103.00 from holding Scentre Group or generate 39.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Flagship Investments vs. Scentre Group
Performance |
| Timeline |
| Flagship Investments |
| Scentre Group |
Flagship Investments and Scentre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flagship Investments and Scentre
The main advantage of trading using opposite Flagship Investments and Scentre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flagship Investments position performs unexpectedly, Scentre 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 Scentre will offset losses from the drop in Scentre's long position.| Flagship Investments vs. Aristocrat Leisure | Flagship Investments vs. Group 6 Metals | Flagship Investments vs. Stelar Metals | Flagship Investments vs. Pure Foods Tasmania |
| Scentre vs. Collins Foods | Scentre vs. Regis Healthcare | Scentre vs. Global Health | Scentre vs. Energy Technologies Limited |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm |