Correlation Between CENTURIA OFFICE and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and Yuexiu Transport 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 CENTURIA OFFICE and Yuexiu Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CENTURIA OFFICE REIT and Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on CENTURIA OFFICE and Yuexiu Transport 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 CENTURIA OFFICE with a short position of Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and Yuexiu Transport.
Diversification Opportunities for CENTURIA OFFICE and Yuexiu Transport
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CENTURIA and Yuexiu is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and Yuexiu Transport Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuexiu Transport Inf and CENTURIA OFFICE 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 CENTURIA OFFICE REIT are associated (or correlated) with Yuexiu Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuexiu Transport Inf has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and Yuexiu Transport go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and Yuexiu Transport
Assuming the 90 days horizon CENTURIA OFFICE REIT is expected to under-perform the Yuexiu Transport. But the stock apears to be less risky and, when comparing its historical volatility, CENTURIA OFFICE REIT is 3.26 times less risky than Yuexiu Transport. The stock trades about -0.1 of its potential returns per unit of risk. The Yuexiu Transport Infrastructure is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 30.00 in Yuexiu Transport Infrastructure on September 25, 2024 and sell it today you would earn a total of 15.00 from holding Yuexiu Transport Infrastructure or generate 50.0% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CENTURIA OFFICE REIT vs. Yuexiu Transport Infrastructur
Performance |
Timeline |
CENTURIA OFFICE REIT |
Yuexiu Transport Inf |
CENTURIA OFFICE and Yuexiu Transport Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CENTURIA OFFICE and Yuexiu Transport
The main advantage of trading using opposite CENTURIA OFFICE and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, Yuexiu Transport 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 Yuexiu Transport will offset losses from the drop in Yuexiu Transport's long position.CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc | CENTURIA OFFICE vs. Apple Inc |
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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