Correlation Between Home Consortium and Scentre
Can any of the company-specific risk be diversified away by investing in both Home Consortium 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 Home Consortium and Scentre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Home Consortium and Scentre Group, you can compare the effects of market volatilities on Home Consortium 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 Home Consortium with a short position of Scentre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Home Consortium and Scentre.
Diversification Opportunities for Home Consortium and Scentre
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Home and Scentre is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Home Consortium and Scentre Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scentre Group and Home Consortium 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 Home Consortium 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 Home Consortium i.e., Home Consortium and Scentre go up and down completely randomly.
Pair Corralation between Home Consortium and Scentre
Assuming the 90 days trading horizon Home Consortium is expected to generate 3.99 times more return on investment than Scentre. However, Home Consortium is 3.99 times more volatile than Scentre Group. It trades about 0.42 of its potential returns per unit of risk. Scentre Group is currently generating about -0.01 per unit of risk. If you would invest 921.00 in Home Consortium on August 25, 2024 and sell it today you would earn a total of 283.00 from holding Home Consortium or generate 30.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Home Consortium vs. Scentre Group
Performance |
| Timeline |
| Home Consortium |
| Scentre Group |
Home Consortium and Scentre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Home Consortium and Scentre
The main advantage of trading using opposite Home Consortium and Scentre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Home Consortium 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.| Home Consortium vs. Scentre Group | Home Consortium vs. Vicinity Centres Re | Home Consortium vs. Charter Hall Retail | Home Consortium vs. Cromwell Property Group |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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