Correlation Between Centuria Industrial and Recce

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

Diversification Opportunities for Centuria Industrial and Recce

0.69

Correlation Coefficient

Centuria Industrial  Recce

Poor diversification

The 3 months correlation between Centuria and Recce is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Centuria Industrial Reit and Recce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Recce 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 Recce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Recce has no effect on the direction of Centuria Industrial i.e., Centuria Industrial and Recce go up and down completely randomly.

Pair Corralation between Centuria Industrial and Recce

Assuming the 90 days trading horizon Centuria Industrial Reit is expected to under-perform the Recce. But the stock apears to be less risky and, when comparing its historical volatility, Centuria Industrial Reit is 4.05 times less risky than Recce. The stock trades about -0.21 of its potential returns per unit of risk. The Recce is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  51.00  in Recce on September 13, 2024 and sell it today you would earn a total of  0.00  from holding Recce or generate 0.0% return on investment over 90 days.

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

Centuria Industrial Reit  vs.  Recce

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.

Recce

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Recce are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable technical and fundamental indicators, Recce 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 Recce

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

The idea behind Centuria Industrial Reit and Recce 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.