Correlation Between CENTURIA OFFICE and Coca-Cola European

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

Diversification Opportunities for CENTURIA OFFICE and Coca-Cola European

-0.64

Correlation Coefficient

CENTURIA OFFICE  Coca-Cola European

Excellent diversification

The 3 months correlation between CENTURIA and Coca-Cola is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and Coca Cola European Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola European 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 Coca-Cola European. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola European has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and Coca-Cola European go up and down completely randomly.

Pair Corralation between CENTURIA OFFICE and Coca-Cola European

Assuming the 90 days horizon CENTURIA OFFICE REIT is expected to under-perform the Coca-Cola European. In addition to that, CENTURIA OFFICE is 1.16 times more volatile than Coca Cola European Partners. It trades about -0.01 of its total potential returns per unit of risk. Coca Cola European Partners is currently generating about 0.05 per unit of volatility. If you would invest  5,762  in Coca Cola European Partners on October 3, 2024 and sell it today you would earn a total of  1,468  from holding Coca Cola European Partners or generate 25.48% 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.  Coca Cola European Partners

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 uncertain performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Coca Cola European

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Coca Cola European Partners are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, Coca-Cola European may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with CENTURIA OFFICE and Coca-Cola European

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

The idea behind CENTURIA OFFICE REIT and Coca Cola European Partners 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.