Correlation Between Credit Clear and Centaurus Metals
Can any of the company-specific risk be diversified away by investing in both Credit Clear 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 Credit Clear and Centaurus Metals into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Clear and Centaurus Metals, you can compare the effects of market volatilities on Credit Clear 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 Credit Clear with a short position of Centaurus Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Clear and Centaurus Metals.
Diversification Opportunities for Credit Clear and Centaurus Metals
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Credit and Centaurus is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Credit Clear and Centaurus Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centaurus Metals and Credit Clear 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 Credit Clear 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 Credit Clear i.e., Credit Clear and Centaurus Metals go up and down completely randomly.
Pair Corralation between Credit Clear and Centaurus Metals
Assuming the 90 days trading horizon Credit Clear is expected to generate 0.95 times more return on investment than Centaurus Metals. However, Credit Clear is 1.06 times less risky than Centaurus Metals. It trades about 0.01 of its potential returns per unit of risk. Centaurus Metals is currently generating about -0.03 per unit of risk. If you would invest 40.00 in Credit Clear on September 3, 2024 and sell it today you would lose (5.00) from holding Credit Clear or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Credit Clear vs. Centaurus Metals
Performance |
| Timeline |
| Credit Clear |
| Centaurus Metals |
Credit Clear and Centaurus Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Clear and Centaurus Metals
The main advantage of trading using opposite Credit Clear and Centaurus Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Clear 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.| Credit Clear vs. Commonwealth Bank | Credit Clear vs. Commonwealth Bank of | Credit Clear vs. Champion Iron | Credit Clear vs. iShares Global Healthcare |
| Centaurus Metals vs. Northern Star Resources | Centaurus Metals vs. Evolution Mining | Centaurus Metals vs. Bluescope Steel | Centaurus Metals vs. Aneka Tambang Tbk |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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