Correlation Between Pfeiffer Vacuum and Centrica PLC
Can any of the company-specific risk be diversified away by investing in both Pfeiffer Vacuum and Centrica PLC 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 Pfeiffer Vacuum and Centrica PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pfeiffer Vacuum Technology and Centrica PLC, you can compare the effects of market volatilities on Pfeiffer Vacuum and Centrica PLC 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 Pfeiffer Vacuum with a short position of Centrica PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pfeiffer Vacuum and Centrica PLC.
Diversification Opportunities for Pfeiffer Vacuum and Centrica PLC
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pfeiffer and Centrica is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Pfeiffer Vacuum Technology and Centrica PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrica PLC and Pfeiffer Vacuum 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 Pfeiffer Vacuum Technology are associated (or correlated) with Centrica PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrica PLC has no effect on the direction of Pfeiffer Vacuum i.e., Pfeiffer Vacuum and Centrica PLC go up and down completely randomly.
Pair Corralation between Pfeiffer Vacuum and Centrica PLC
Assuming the 90 days trading horizon Pfeiffer Vacuum Technology is expected to under-perform the Centrica PLC. But the stock apears to be less risky and, when comparing its historical volatility, Pfeiffer Vacuum Technology is 2.34 times less risky than Centrica PLC. The stock trades about -0.04 of its potential returns per unit of risk. The Centrica PLC is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 12,440 in Centrica PLC on September 13, 2024 and sell it today you would earn a total of 720.00 from holding Centrica PLC or generate 5.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Pfeiffer Vacuum Technology vs. Centrica PLC
Performance |
| Timeline |
| Pfeiffer Vacuum Tech |
| Centrica PLC |
Pfeiffer Vacuum and Centrica PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pfeiffer Vacuum and Centrica PLC
The main advantage of trading using opposite Pfeiffer Vacuum and Centrica PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pfeiffer Vacuum position performs unexpectedly, Centrica PLC 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 Centrica PLC will offset losses from the drop in Centrica PLC's long position.| Pfeiffer Vacuum vs. Bank of Ireland | Pfeiffer Vacuum vs. Monster Beverage Corp | Pfeiffer Vacuum vs. MoneysupermarketCom Group PLC | Pfeiffer Vacuum vs. Alior Bank SA |
| Centrica PLC vs. Indutrade AB | Centrica PLC vs. Various Eateries PLC | Centrica PLC vs. Supermarket Income REIT | Centrica PLC vs. Ecclesiastical Insurance Office |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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