Correlation Between Scentre and Home Consortium
Can any of the company-specific risk be diversified away by investing in both Scentre and Home Consortium 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 Home Consortium into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scentre Group and Home Consortium, you can compare the effects of market volatilities on Scentre and Home Consortium 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 Home Consortium. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scentre and Home Consortium.
Diversification Opportunities for Scentre and Home Consortium
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scentre and Home is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Scentre Group and Home Consortium in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home Consortium 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 Home Consortium. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home Consortium has no effect on the direction of Scentre i.e., Scentre and Home Consortium go up and down completely randomly.
Pair Corralation between Scentre and Home Consortium
Assuming the 90 days trading horizon Scentre is expected to generate 4.29 times less return on investment than Home Consortium. But when comparing it to its historical volatility, Scentre Group is 1.43 times less risky than Home Consortium. It trades about 0.21 of its potential returns per unit of risk. Home Consortium is currently generating about 0.64 of returns per unit of risk over similar time horizon. If you would invest 1,013 in Home Consortium on August 29, 2024 and sell it today you would earn a total of 214.00 from holding Home Consortium or generate 21.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scentre Group vs. Home Consortium
Performance |
| Timeline |
| Scentre Group |
| Home Consortium |
Scentre and Home Consortium Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scentre and Home Consortium
The main advantage of trading using opposite Scentre and Home Consortium positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scentre position performs unexpectedly, Home Consortium 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 Home Consortium will offset losses from the drop in Home Consortium's long position.| Scentre vs. Mayfield Childcare | Scentre vs. Retail Food Group | Scentre vs. Autosports Group | Scentre vs. Patriot Battery Metals |
| Home Consortium vs. Scentre Group | Home Consortium vs. Vicinity Centres Re | Home Consortium vs. Charter Hall Retail | Home Consortium vs. Cromwell Property 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |