Correlation Between Centuria Industrial and Mirrabooka Investments

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

Diversification Opportunities for Centuria Industrial and Mirrabooka Investments

-0.23

Correlation Coefficient

Centuria Industrial  Mirrabooka Investments

Very good diversification

The 3 months correlation between Centuria and Mirrabooka is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Centuria Industrial Reit and Mirrabooka Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirrabooka Investments 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 Mirrabooka Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirrabooka Investments has no effect on the direction of Centuria Industrial i.e., Centuria Industrial and Mirrabooka Investments go up and down completely randomly.

Pair Corralation between Centuria Industrial and Mirrabooka Investments

Assuming the 90 days trading horizon Centuria Industrial is expected to generate 7.37 times less return on investment than Mirrabooka Investments. In addition to that, Centuria Industrial is 1.01 times more volatile than Mirrabooka Investments. It trades about 0.01 of its total potential returns per unit of risk. Mirrabooka Investments is currently generating about 0.05 per unit of volatility. If you would invest  265.00  in Mirrabooka Investments on September 23, 2024 and sell it today you would earn a total of  70.00  from holding Mirrabooka Investments or generate 26.42% return on investment over 90 days.

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

Centuria Industrial Reit  vs.  Mirrabooka Investments

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Mirrabooka Investments

Risk-Adjusted Performance

3 of 100

Insignificant

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

Pair Trading with Centuria Industrial and Mirrabooka Investments

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

The idea behind Centuria Industrial Reit and Mirrabooka Investments 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.