Correlation Between Carindale Property and Sports Entertainment

Can any of the company-specific risk be diversified away by investing in both Carindale Property and Sports Entertainment 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 Carindale Property and Sports Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Carindale Property Trust and Sports Entertainment Group, you can compare the effects of market volatilities on Carindale Property and Sports Entertainment 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 Carindale Property with a short position of Sports Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carindale Property and Sports Entertainment.

Diversification Opportunities for Carindale Property and Sports Entertainment

-0.67

Correlation Coefficient

Carindale Property  Sports Entertainment

Excellent diversification

The 3 months correlation between Carindale and Sports is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Carindale Property Trust and Sports Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sports Entertainment and Carindale Property 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 Carindale Property Trust are associated (or correlated) with Sports Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sports Entertainment has no effect on the direction of Carindale Property i.e., Carindale Property and Sports Entertainment go up and down completely randomly.

Pair Corralation between Carindale Property and Sports Entertainment

Assuming the 90 days trading horizon Carindale Property Trust is expected to generate 0.26 times more return on investment than Sports Entertainment. However, Carindale Property Trust is 3.88 times less risky than Sports Entertainment. It trades about 0.17 of its potential returns per unit of risk. Sports Entertainment Group is currently generating about -0.16 per unit of risk. If you would invest  453.00  in Carindale Property Trust on October 9, 2024 and sell it today you would earn a total of  15.00  from holding Carindale Property Trust or generate 3.31% return on investment over 90 days.

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

Carindale Property Trust  vs.  Sports Entertainment Group

Carindale Property Trust

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Carindale Property Trust are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Carindale Property is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Sports Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sports Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Carindale Property and Sports Entertainment

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

The idea behind Carindale Property Trust and Sports Entertainment Group 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.