Correlation Between Liberty Financial and Centuria Industrial
Can any of the company-specific risk be diversified away by investing in both Liberty Financial and Centuria Industrial 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 Liberty Financial and Centuria Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Liberty Financial Group and Centuria Industrial Reit, you can compare the effects of market volatilities on Liberty Financial and Centuria Industrial 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 Liberty Financial with a short position of Centuria Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Liberty Financial and Centuria Industrial.
Diversification Opportunities for Liberty Financial and Centuria Industrial
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Liberty and Centuria is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Liberty Financial Group and Centuria Industrial Reit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centuria Industrial Reit and Liberty Financial 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 Liberty Financial Group are associated (or correlated) with Centuria Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centuria Industrial Reit has no effect on the direction of Liberty Financial i.e., Liberty Financial and Centuria Industrial go up and down completely randomly.
Pair Corralation between Liberty Financial and Centuria Industrial
Assuming the 90 days trading horizon Liberty Financial Group is expected to generate 1.46 times more return on investment than Centuria Industrial. However, Liberty Financial is 1.46 times more volatile than Centuria Industrial Reit. It trades about 0.33 of its potential returns per unit of risk. Centuria Industrial Reit is currently generating about 0.03 per unit of risk. If you would invest 321.00 in Liberty Financial Group on October 17, 2024 and sell it today you would earn a total of 44.00 from holding Liberty Financial Group or generate 13.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Liberty Financial Group vs. Centuria Industrial Reit
Performance |
| Timeline |
| Liberty Financial |
| Centuria Industrial Reit |
Liberty Financial and Centuria Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Liberty Financial and Centuria Industrial
The main advantage of trading using opposite Liberty Financial and Centuria Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Liberty Financial position performs unexpectedly, Centuria Industrial 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 Centuria Industrial will offset losses from the drop in Centuria Industrial's long position.| Liberty Financial vs. Autosports Group | Liberty Financial vs. Seven West Media | Liberty Financial vs. AiMedia Technologies | Liberty Financial vs. Hawsons Iron |
| Centuria Industrial vs. Insurance Australia Group | Centuria Industrial vs. Auswide Bank | Centuria Industrial vs. Latitude Financial Services | Centuria Industrial vs. Liberty Financial Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |