Correlation Between Plastic Omnium and CENTURIA OFFICE

Can any of the company-specific risk be diversified away by investing in both Plastic Omnium and CENTURIA OFFICE 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 Plastic Omnium and CENTURIA OFFICE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Plastic Omnium and CENTURIA OFFICE REIT, you can compare the effects of market volatilities on Plastic Omnium and CENTURIA OFFICE 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 Plastic Omnium with a short position of CENTURIA OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Plastic Omnium and CENTURIA OFFICE.

Diversification Opportunities for Plastic Omnium and CENTURIA OFFICE

0.61

Correlation Coefficient

Plastic Omnium  CENTURIA OFFICE

Poor diversification

The 3 months correlation between Plastic and CENTURIA is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Plastic Omnium and CENTURIA OFFICE REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTURIA OFFICE REIT and Plastic Omnium 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 Plastic Omnium are associated (or correlated) with CENTURIA OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTURIA OFFICE REIT has no effect on the direction of Plastic Omnium i.e., Plastic Omnium and CENTURIA OFFICE go up and down completely randomly.

Pair Corralation between Plastic Omnium and CENTURIA OFFICE

Assuming the 90 days trading horizon Plastic Omnium is expected to generate 4.28 times less return on investment than CENTURIA OFFICE. In addition to that, Plastic Omnium is 1.6 times more volatile than CENTURIA OFFICE REIT. It trades about 0.01 of its total potential returns per unit of risk. CENTURIA OFFICE REIT is currently generating about 0.09 per unit of volatility. If you would invest  58.00  in CENTURIA OFFICE REIT on December 24, 2024 and sell it today you would earn a total of  6.00  from holding CENTURIA OFFICE REIT or generate 10.34% return on investment over 90 days.

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

Plastic Omnium  vs.  CENTURIA OFFICE REIT

Plastic Omnium

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Plastic Omnium are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Plastic Omnium is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

CENTURIA OFFICE REIT

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CENTURIA OFFICE REIT are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, CENTURIA OFFICE may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Plastic Omnium and CENTURIA OFFICE

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

The idea behind Plastic Omnium and CENTURIA OFFICE 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.

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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.