Correlation Between CENTURIA OFFICE and LG Display
Can any of the company-specific risk be diversified away by investing in both CENTURIA OFFICE and LG Display 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 LG Display 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 LG Display Co, you can compare the effects of market volatilities on CENTURIA OFFICE and LG Display 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 LG Display. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTURIA OFFICE and LG Display.
Diversification Opportunities for CENTURIA OFFICE and LG Display
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CENTURIA and LGA is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and LG Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LG Display 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 LG Display. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LG Display has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and LG Display go up and down completely randomly.
Pair Corralation between CENTURIA OFFICE and LG Display
Assuming the 90 days horizon CENTURIA OFFICE REIT is expected to generate 1.62 times more return on investment than LG Display. However, CENTURIA OFFICE is 1.62 times more volatile than LG Display Co. It trades about 0.0 of its potential returns per unit of risk. LG Display Co is currently generating about -0.19 per unit of risk. If you would invest 69.00 in CENTURIA OFFICE REIT on October 6, 2024 and sell it today you would lose (1.00) from holding CENTURIA OFFICE REIT or give up 1.45% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
CENTURIA OFFICE REIT vs. LG Display Co
Performance |
Timeline |
CENTURIA OFFICE REIT |
LG Display |
CENTURIA OFFICE and LG Display Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with CENTURIA OFFICE and LG Display
The main advantage of trading using opposite CENTURIA OFFICE and LG Display positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTURIA OFFICE position performs unexpectedly, LG Display 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 LG Display will offset losses from the drop in LG Display'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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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