Correlation Between Sandfire Resources and Centuria Industrial
Can any of the company-specific risk be diversified away by investing in both Sandfire Resources 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 Sandfire Resources and Centuria Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sandfire Resources NL and Centuria Industrial Reit, you can compare the effects of market volatilities on Sandfire Resources 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 Sandfire Resources with a short position of Centuria Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sandfire Resources and Centuria Industrial.
Diversification Opportunities for Sandfire Resources and Centuria Industrial
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sandfire and Centuria is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sandfire Resources NL 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 Sandfire Resources 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 Sandfire Resources NL 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 Sandfire Resources i.e., Sandfire Resources and Centuria Industrial go up and down completely randomly.
Pair Corralation between Sandfire Resources and Centuria Industrial
Assuming the 90 days trading horizon Sandfire Resources NL is expected to generate 2.08 times more return on investment than Centuria Industrial. However, Sandfire Resources is 2.08 times more volatile than Centuria Industrial Reit. It trades about 0.13 of its potential returns per unit of risk. Centuria Industrial Reit is currently generating about -0.31 per unit of risk. If you would invest 1,012 in Sandfire Resources NL on September 13, 2024 and sell it today you would earn a total of 42.00 from holding Sandfire Resources NL or generate 4.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sandfire Resources NL vs. Centuria Industrial Reit
Performance |
| Timeline |
| Sandfire Resources |
| Centuria Industrial Reit |
Sandfire Resources and Centuria Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sandfire Resources and Centuria Industrial
The main advantage of trading using opposite Sandfire Resources and Centuria Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sandfire Resources 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.| Sandfire Resources vs. Centuria Industrial Reit | Sandfire Resources vs. Strickland Metals | Sandfire Resources vs. Aurelia Metals | Sandfire Resources vs. Wt Financial Group |
| Centuria Industrial vs. Auctus Alternative Investments | Centuria Industrial vs. Carawine Resources Limited | Centuria Industrial vs. Mirrabooka Investments | Centuria Industrial vs. Embark Education 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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