Correlation Between KURITA WTR and CENTURIA OFFICE

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

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

Diversification Opportunities for KURITA WTR and CENTURIA OFFICE

-0.24

Correlation Coefficient

KURITA WTR  CENTURIA OFFICE

Very good diversification

The 3 months correlation between KURITA and CENTURIA is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding KURITA WTR INDUNSPADR 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 KURITA WTR 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 KURITA WTR INDUNSPADR 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 KURITA WTR i.e., KURITA WTR and CENTURIA OFFICE go up and down completely randomly.

Pair Corralation between KURITA WTR and CENTURIA OFFICE

Assuming the 90 days trading horizon KURITA WTR INDUNSPADR is expected to under-perform the CENTURIA OFFICE. But the stock apears to be less risky and, when comparing its historical volatility, KURITA WTR INDUNSPADR is 1.05 times less risky than CENTURIA OFFICE. The stock trades about -0.09 of its potential returns per unit of risk. The CENTURIA OFFICE REIT is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  61.00  in CENTURIA OFFICE REIT on December 22, 2024 and sell it today you would earn a total of  3.00  from holding CENTURIA OFFICE REIT or generate 4.92% return on investment over 90 days.

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

KURITA WTR INDUNSPADR  vs.  CENTURIA OFFICE REIT

KURITA WTR INDUNSPADR

Risk-Adjusted Performance

Very Weak

Over the last 90 days KURITA WTR INDUNSPADR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's forward indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

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 3 (%) 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 KURITA WTR and CENTURIA OFFICE

The main advantage of trading using opposite KURITA WTR and CENTURIA OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KURITA WTR 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 KURITA WTR INDUNSPADR 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..