Correlation Between ACDC Metals and Centaurus Metals
Can any of the company-specific risk be diversified away by investing in both ACDC Metals and Centaurus Metals 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 ACDC Metals and Centaurus Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ACDC Metals and Centaurus Metals, you can compare the effects of market volatilities on ACDC Metals and Centaurus Metals 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 ACDC Metals with a short position of Centaurus Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACDC Metals and Centaurus Metals.
Diversification Opportunities for ACDC Metals and Centaurus Metals
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ACDC and Centaurus is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding ACDC Metals and Centaurus Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaurus Metals and ACDC 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 ACDC Metals are associated (or correlated) with Centaurus Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centaurus Metals has no effect on the direction of ACDC Metals i.e., ACDC Metals and Centaurus Metals go up and down completely randomly.
Pair Corralation between ACDC Metals and Centaurus Metals
Assuming the 90 days trading horizon ACDC Metals is expected to under-perform the Centaurus Metals. In addition to that, ACDC Metals is 1.08 times more volatile than Centaurus Metals. It trades about -0.15 of its total potential returns per unit of risk. Centaurus Metals is currently generating about -0.06 per unit of volatility. If you would invest 37.00 in Centaurus Metals on October 17, 2024 and sell it today you would lose (2.00) from holding Centaurus Metals or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ACDC Metals vs. Centaurus Metals
Performance |
| Timeline |
| ACDC Metals |
| Centaurus Metals |
ACDC Metals and Centaurus Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ACDC Metals and Centaurus Metals
The main advantage of trading using opposite ACDC Metals and Centaurus Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACDC Metals position performs unexpectedly, Centaurus Metals 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 Centaurus Metals will offset losses from the drop in Centaurus Metals' long position.| ACDC Metals vs. Australian Unity Office | ACDC Metals vs. Perseus Mining | ACDC Metals vs. Aeon Metals | ACDC Metals vs. Infomedia |
| Centaurus Metals vs. AiMedia Technologies | Centaurus Metals vs. Super Retail Group | Centaurus Metals vs. Centrex Metals | Centaurus Metals vs. Falcon Metals |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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