Correlation Between Centaur Media and MoneysupermarketCom
Can any of the company-specific risk be diversified away by investing in both Centaur Media and MoneysupermarketCom 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 Media and MoneysupermarketCom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centaur Media and MoneysupermarketCom Group PLC, you can compare the effects of market volatilities on Centaur Media and MoneysupermarketCom 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 Media with a short position of MoneysupermarketCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaur Media and MoneysupermarketCom.
Diversification Opportunities for Centaur Media and MoneysupermarketCom
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Centaur and MoneysupermarketCom is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Centaur Media and MoneysupermarketCom Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MoneysupermarketCom and Centaur Media 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 Media are associated (or correlated) with MoneysupermarketCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MoneysupermarketCom has no effect on the direction of Centaur Media i.e., Centaur Media and MoneysupermarketCom go up and down completely randomly.
Pair Corralation between Centaur Media and MoneysupermarketCom
Assuming the 90 days trading horizon Centaur Media is expected to under-perform the MoneysupermarketCom. In addition to that, Centaur Media is 1.19 times more volatile than MoneysupermarketCom Group PLC. It trades about -0.06 of its total potential returns per unit of risk. MoneysupermarketCom Group PLC is currently generating about 0.17 per unit of volatility. If you would invest 19,020 in MoneysupermarketCom Group PLC on August 31, 2024 and sell it today you would earn a total of 910.00 from holding MoneysupermarketCom Group PLC or generate 4.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Centaur Media vs. MoneysupermarketCom Group PLC
Performance |
| Timeline |
| Centaur Media |
| MoneysupermarketCom |
Centaur Media and MoneysupermarketCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centaur Media and MoneysupermarketCom
The main advantage of trading using opposite Centaur Media and MoneysupermarketCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaur Media position performs unexpectedly, MoneysupermarketCom 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 MoneysupermarketCom will offset losses from the drop in MoneysupermarketCom's long position.| Centaur Media vs. Cornish Metals | Centaur Media vs. Silvercorp Metals | Centaur Media vs. HCA Healthcare | Centaur Media vs. Target Healthcare REIT |
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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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