Correlation Between Frasers Property and Frasers Centrepoint

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

By analyzing existing cross correlation between Frasers Property Limited and Frasers Centrepoint Trust, you can compare the effects of market volatilities on Frasers Property and Frasers Centrepoint 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 Frasers Property with a short position of Frasers Centrepoint. Check out your portfolio center. Please also check ongoing floating volatility patterns of Frasers Property and Frasers Centrepoint.

Diversification Opportunities for Frasers Property and Frasers Centrepoint

0.09

Correlation Coefficient

Frasers Property  Frasers Centrepoint

Significant diversification

The 3 months correlation between Frasers and Frasers is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Frasers Property Limited and Frasers Centrepoint Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frasers Centrepoint Trust and Frasers Property 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 Frasers Property Limited are associated (or correlated) with Frasers Centrepoint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frasers Centrepoint Trust has no effect on the direction of Frasers Property i.e., Frasers Property and Frasers Centrepoint go up and down completely randomly.

Pair Corralation between Frasers Property and Frasers Centrepoint

If you would invest  60.00  in Frasers Property Limited on January 24, 2024 and sell it today you would earn a total of  0.00  from holding Frasers Property Limited or generate 0.0% return on investment over 90 days.

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

Frasers Property Limited  vs.  Frasers Centrepoint Trust

Frasers Property

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Frasers Property Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent basic indicators, Frasers Property reported solid returns over the last few months and may actually be approaching a breakup point.

Frasers Centrepoint Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Frasers Centrepoint Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Frasers Centrepoint is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Frasers Property and Frasers Centrepoint

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

The idea behind Frasers Property Limited and Frasers Centrepoint Trust 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.