Correlation Between Centaur Bci and Life Healthcare

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Can any of the company-specific risk be diversified away by investing in both Centaur Bci and Life Healthcare 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 Centaur Bci and Life Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centaur Bci Balanced and Life Healthcare, you can compare the effects of market volatilities on Centaur Bci and Life Healthcare 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 Centaur Bci with a short position of Life Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaur Bci and Life Healthcare.

Diversification Opportunities for Centaur Bci and Life Healthcare

0.83
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Centaur and Life is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Centaur Bci Balanced and Life Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Life Healthcare and Centaur Bci 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 Centaur Bci Balanced are associated (or correlated) with Life Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Life Healthcare has no effect on the direction of Centaur Bci i.e., Centaur Bci and Life Healthcare go up and down completely randomly.

Pair Corralation between Centaur Bci and Life Healthcare

Assuming the 90 days trading horizon Centaur Bci Balanced is expected to generate 0.25 times more return on investment than Life Healthcare. However, Centaur Bci Balanced is 3.97 times less risky than Life Healthcare. It trades about 0.17 of its potential returns per unit of risk. Life Healthcare is currently generating about 0.04 per unit of risk. If you would invest  239.00  in Centaur Bci Balanced on August 28, 2024 and sell it today you would earn a total of  3.00  from holding Centaur Bci Balanced or generate 1.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Centaur Bci Balanced  vs.  Life Healthcare

 Performance 
       Timeline  
Centaur Bci Balanced 

Risk-Adjusted Performance

9 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Centaur Bci Balanced are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. In spite of fairly strong basic indicators, Centaur Bci is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.
Life Healthcare 

Risk-Adjusted Performance

13 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in Life Healthcare are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Life Healthcare exhibited solid returns over the last few months and may actually be approaching a breakup point.

Centaur Bci and Life Healthcare Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Centaur Bci and Life Healthcare

The main advantage of trading using opposite Centaur Bci and Life Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaur Bci position performs unexpectedly, Life Healthcare 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 Life Healthcare will offset losses from the drop in Life Healthcare's long position.
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The idea behind Centaur Bci Balanced and Life Healthcare 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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