Correlation Between Centurion Acquisition and CNA Financial
Can any of the company-specific risk be diversified away by investing in both Centurion Acquisition and CNA Financial 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 Centurion Acquisition and CNA Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centurion Acquisition Corp and CNA Financial, you can compare the effects of market volatilities on Centurion Acquisition and CNA Financial 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 Centurion Acquisition with a short position of CNA Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centurion Acquisition and CNA Financial.
Diversification Opportunities for Centurion Acquisition and CNA Financial
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centurion and CNA is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Centurion Acquisition Corp and CNA Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNA Financial and Centurion Acquisition 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 Centurion Acquisition Corp are associated (or correlated) with CNA Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNA Financial has no effect on the direction of Centurion Acquisition i.e., Centurion Acquisition and CNA Financial go up and down completely randomly.
Pair Corralation between Centurion Acquisition and CNA Financial
Considering the 90-day investment horizon Centurion Acquisition is expected to generate 3.0 times less return on investment than CNA Financial. But when comparing it to its historical volatility, Centurion Acquisition Corp is 7.79 times less risky than CNA Financial. It trades about 0.16 of its potential returns per unit of risk. CNA Financial is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,821 in CNA Financial on October 21, 2024 and sell it today you would earn a total of 65.00 from holding CNA Financial or generate 1.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centurion Acquisition Corp vs. CNA Financial
Performance |
| Timeline |
| Centurion Acquisition |
| CNA Financial |
Centurion Acquisition and CNA Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centurion Acquisition and CNA Financial
The main advantage of trading using opposite Centurion Acquisition and CNA Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centurion Acquisition position performs unexpectedly, CNA Financial 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 CNA Financial will offset losses from the drop in CNA Financial's long position.| Centurion Acquisition vs. CNA Financial | Centurion Acquisition vs. NETGEAR | Centurion Acquisition vs. Weibo Corp | Centurion Acquisition vs. Universal Insurance Holdings |
| CNA Financial vs. Selective Insurance Group | CNA Financial vs. Kemper | CNA Financial vs. Donegal Group B | CNA Financial vs. Argo Group International |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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