Correlation Between Techgen Metals and Centuria Industrial

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

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

Diversification Opportunities for Techgen Metals and Centuria Industrial

0.42

Correlation Coefficient

Techgen Metals  Centuria Industrial

Very weak diversification

The 3 months correlation between Techgen and Centuria is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Techgen Metals and Centuria Industrial Reit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centuria Industrial Reit and Techgen Metals 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 Techgen Metals are associated (or correlated) with Centuria Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centuria Industrial Reit has no effect on the direction of Techgen Metals i.e., Techgen Metals and Centuria Industrial go up and down completely randomly.

Pair Corralation between Techgen Metals and Centuria Industrial

Assuming the 90 days trading horizon Techgen Metals is expected to generate 6.17 times more return on investment than Centuria Industrial. However, Techgen Metals is 6.17 times more volatile than Centuria Industrial Reit. It trades about -0.01 of its potential returns per unit of risk. Centuria Industrial Reit is currently generating about -0.27 per unit of risk. If you would invest  3.60  in Techgen Metals on September 18, 2024 and sell it today you would lose (0.40) from holding Techgen Metals or give up 11.11% of portfolio value over 90 days.

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

Techgen Metals  vs.  Centuria Industrial Reit

Techgen Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Techgen Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Techgen Metals is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

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.

Pair Trading with Techgen Metals and Centuria Industrial

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

The idea behind Techgen Metals and Centuria Industrial 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.

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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.