Correlation Between Central Asia and Emergent Biosolutions
Can any of the company-specific risk be diversified away by investing in both Central Asia and Emergent Biosolutions 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 Central Asia and Emergent Biosolutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Asia Metals and Emergent Biosolutions, you can compare the effects of market volatilities on Central Asia and Emergent Biosolutions 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 Central Asia with a short position of Emergent Biosolutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Asia and Emergent Biosolutions.
Diversification Opportunities for Central Asia and Emergent Biosolutions
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Central and Emergent is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Central Asia Metals and Emergent Biosolutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emergent Biosolutions and Central Asia 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 Central Asia Metals are associated (or correlated) with Emergent Biosolutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emergent Biosolutions has no effect on the direction of Central Asia i.e., Central Asia and Emergent Biosolutions go up and down completely randomly.
Pair Corralation between Central Asia and Emergent Biosolutions
Assuming the 90 days trading horizon Central Asia Metals is expected to under-perform the Emergent Biosolutions. But the stock apears to be less risky and, when comparing its historical volatility, Central Asia Metals is 6.52 times less risky than Emergent Biosolutions. The stock trades about -0.32 of its potential returns per unit of risk. The Emergent Biosolutions is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 985.00 in Emergent Biosolutions on August 31, 2024 and sell it today you would earn a total of 15.00 from holding Emergent Biosolutions or generate 1.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Asia Metals vs. Emergent Biosolutions
Performance |
| Timeline |
| Central Asia Metals |
| Emergent Biosolutions |
Central Asia and Emergent Biosolutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Asia and Emergent Biosolutions
The main advantage of trading using opposite Central Asia and Emergent Biosolutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Asia position performs unexpectedly, Emergent Biosolutions 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 Emergent Biosolutions will offset losses from the drop in Emergent Biosolutions' long position.| Central Asia vs. Centamin PLC | Central Asia vs. Anglo Asian Mining | Central Asia vs. Metals Exploration Plc |
| Emergent Biosolutions vs. Flow Traders NV | Emergent Biosolutions vs. Pfeiffer Vacuum Technology | Emergent Biosolutions vs. Beowulf Mining | Emergent Biosolutions vs. Central Asia 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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