Correlation Between CENTURIA OFFICE and POWER METALS

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

Diversification Opportunities for CENTURIA OFFICE and POWER METALS

0.18

Correlation Coefficient

CENTURIA OFFICE  POWER METALS

Average diversification

The 3 months correlation between CENTURIA and POWER is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding CENTURIA OFFICE REIT and POWER METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on POWER METALS 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 POWER METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of POWER METALS has no effect on the direction of CENTURIA OFFICE i.e., CENTURIA OFFICE and POWER METALS go up and down completely randomly.

Pair Corralation between CENTURIA OFFICE and POWER METALS

Assuming the 90 days horizon CENTURIA OFFICE is expected to generate 20.14 times less return on investment than POWER METALS. But when comparing it to its historical volatility, CENTURIA OFFICE REIT is 3.3 times less risky than POWER METALS. It trades about 0.05 of its potential returns per unit of risk. POWER METALS is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  29.00  in POWER METALS on December 23, 2024 and sell it today you would earn a total of  56.00  from holding POWER METALS or generate 193.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CENTURIA OFFICE REIT  vs.  POWER METALS

CENTURIA OFFICE REIT

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CENTURIA OFFICE REIT are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

POWER METALS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in POWER METALS are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, POWER METALS unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CENTURIA OFFICE and POWER METALS

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

The idea behind CENTURIA OFFICE REIT and POWER METALS 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 CEOs Directory module to screen CEOs from public companies around the world.