Correlation Between CENTURIA OFFICE and Fortune Brands

Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and Fortune Brands 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 Fortune Brands 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 Fortune Brands Home, you can compare the effects of market volatilities on CENTURIA OFFICE and Fortune Brands 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 Fortune Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and Fortune Brands.

Diversification Opportunities for CENTURIA OFFICE and Fortune Brands

0.0

Correlation Coefficient

CENTURIA OFFICE  Fortune Brands

Pay attention - limited upside

The 3 months correlation between CENTURIA and Fortune is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and Fortune Brands Home in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fortune Brands Home 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 Fortune Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fortune Brands Home has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and Fortune Brands go up and down completely randomly.

Pair Corralation between CENTURIA OFFICE and Fortune Brands

If you would invest  63.00  in CENTURIA OFFICE REIT on October 10, 2024 and sell it today you would earn a total of  5.00  from holding CENTURIA OFFICE REIT or generate 7.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.88%
Values	Daily Returns

CENTURIA OFFICE REIT  vs.  Fortune Brands Home

CENTURIA OFFICE REIT

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CENTURIA OFFICE REIT has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, CENTURIA OFFICE is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Fortune Brands Home

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fortune Brands Home has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Fortune Brands is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with CENTURIA OFFICE and Fortune Brands

The main advantage of trading using opposite CENTURIA OFFICE and Fortune Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, Fortune Brands 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 Fortune Brands will offset losses from the drop in Fortune Brands' long position.

The idea behind CENTURIA OFFICE REIT and Fortune Brands Home pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.