Correlation Between Scentre and Centuria Industrial
Can any of the company-specific risk be diversified away by investing in both Scentre 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 Scentre and Centuria Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scentre Group and Centuria Industrial Reit, you can compare the effects of market volatilities on Scentre 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 Scentre with a short position of Centuria Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scentre and Centuria Industrial.
Diversification Opportunities for Scentre and Centuria Industrial
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Scentre and Centuria is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Scentre 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 Scentre 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 Scentre 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 Scentre i.e., Scentre and Centuria Industrial go up and down completely randomly.
Pair Corralation between Scentre and Centuria Industrial
Assuming the 90 days trading horizon Scentre Group is expected to generate 1.27 times more return on investment than Centuria Industrial. However, Scentre is 1.27 times more volatile than Centuria Industrial Reit. It trades about 0.08 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 294.00 in Scentre Group on November 3, 2024 and sell it today you would earn a total of 75.00 from holding Scentre Group or generate 25.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Scentre Group vs. Centuria Industrial Reit
Performance |
| Timeline |
| Scentre Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
| Centuria Industrial Reit |
Scentre and Centuria Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scentre and Centuria Industrial
The main advantage of trading using opposite Scentre and Centuria Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scentre 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.| Scentre vs. Data3 | Scentre vs. Australian Unity Office | Scentre vs. Autosports Group | Scentre vs. Sayona Mining |
| Centuria Industrial vs. Cleanaway Waste Management | Centuria Industrial vs. Everest Metals | Centuria Industrial vs. Qbe Insurance Group | Centuria Industrial vs. Beam Communications Holdings |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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