Correlation Between Carlton Investments and Centuria Industrial

Can any of the company-specific risk be diversified away by investing in both Carlton Investments and Centuria Industrial 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 Carlton Investments and Centuria Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Carlton Investments and Centuria Industrial Reit, you can compare the effects of market volatilities on Carlton Investments and Centuria Industrial 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 Carlton Investments with a short position of Centuria Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Carlton Investments and Centuria Industrial.

Diversification Opportunities for Carlton Investments and Centuria Industrial

-0.75

Correlation Coefficient

Carlton Investments  Centuria Industrial

Pay attention - limited upside

The 3 months correlation between Carlton and Centuria is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding Carlton Investments and Centuria Industrial Reit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centuria Industrial Reit and Carlton Investments 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 Carlton Investments are associated (or correlated) with Centuria Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centuria Industrial Reit has no effect on the direction of Carlton Investments i.e., Carlton Investments and Centuria Industrial go up and down completely randomly.

Pair Corralation between Carlton Investments and Centuria Industrial

Assuming the 90 days trading horizon Carlton Investments is expected to generate 0.9 times more return on investment than Centuria Industrial. However, Carlton Investments is 1.11 times less risky than Centuria Industrial. It trades about 0.06 of its potential returns per unit of risk. Centuria Industrial Reit is currently generating about -0.02 per unit of risk. If you would invest  2,903  in Carlton Investments on September 30, 2024 and sell it today you would earn a total of  185.00  from holding Carlton Investments or generate 6.37% return on investment over 90 days.

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

Carlton Investments  vs.  Centuria Industrial Reit

Carlton Investments

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Carlton Investments are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Carlton Investments is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Centuria Industrial Reit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Centuria Industrial Reit has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Carlton Investments and Centuria Industrial

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

The idea behind Carlton Investments and Centuria Industrial Reit 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.

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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.