Correlation Between Centuria Industrial and Maggie Beer

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

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

Diversification Opportunities for Centuria Industrial and Maggie Beer

0.52

Correlation Coefficient

Centuria Industrial  Maggie Beer

Very weak diversification

The 3 months correlation between Centuria and Maggie is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Centuria Industrial Reit and Maggie Beer Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maggie Beer Holdings and Centuria Industrial 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 Industrial Reit are associated (or correlated) with Maggie Beer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maggie Beer Holdings has no effect on the direction of Centuria Industrial i.e., Centuria Industrial and Maggie Beer go up and down completely randomly.

Pair Corralation between Centuria Industrial and Maggie Beer

Assuming the 90 days trading horizon Centuria Industrial is expected to generate 2.62 times less return on investment than Maggie Beer. But when comparing it to its historical volatility, Centuria Industrial Reit is 2.56 times less risky than Maggie Beer. It trades about 0.08 of its potential returns per unit of risk. Maggie Beer Holdings is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  5.40  in Maggie Beer Holdings on December 23, 2024 and sell it today you would earn a total of  0.70  from holding Maggie Beer Holdings or generate 12.96% return on investment over 90 days.

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

Centuria Industrial Reit  vs.  Maggie Beer Holdings

Centuria Industrial Reit

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Centuria Industrial Reit are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Centuria Industrial is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Maggie Beer Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Maggie Beer Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain technical indicators, Maggie Beer unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Centuria Industrial and Maggie Beer

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

The idea behind Centuria Industrial Reit and Maggie Beer Holdings 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.